European investors show financial strength, Schroders finds
European investors save and invest more than 35% of their household income each month, more than three times the amount they set aside to service debt, according to Schroders’s annual European Wealth Index, which tracked investment attitudes and habits of 1,341 affluent investors across 12 countries.
Despite economic uncertainty, European affluent investors show underlying financial strength, with many prioritising the importance of saving and investing for the future.
In a typical month, the average European investor spends 53%, saves and invests 35% and allocates 11% to servicing debts.
An affluent investor is defined as someone with invested assets, excluding primary residence, of €60,000.
“Overall, 80% of respondents had a least one specific financial plan in place and the most common drivers were building up a pension (41%), having an emergency fund to deal with life’s uncertainties (38%), funding hobbies and interests (20%) and retiring early (19%).
The least common motivations across Europe for putting together a financial plan included paying for childcare and nursery fees (6%), preparing for a change of career (6%) and funding care for elderly relatives (7%),” Schroders found.
This figure peaked in the UK (95%), France (87%) and Israel (85%). Investors in the UK and Sweden were most likely to plan to build up a pension. Investors in these countries were also the most likely in Europe to want to build up an emergency fund to deal with life’s uncertainties.
The cost of education and university was most likely to encourage affluent investors in Israel and Portugal to put a financial plan in place whereas investors in France and Sweden were the least likely.
“People are having to react to on going market uncertainty but our research indicates that affluent investors across Europe are saving and investing a significant proportion of their resources, suggesting many are able to juggle day to day costs with the need to make plans to meet long-term goals.
“However, one cause for concern is that in most of the countries surveyed, investors are tending to save more than they invest,” said Peter Beckett, head of international marketing at Schroders.