Market volatility scaring Britons out of saving
Research by CoreData suggests that more than 19 million Britons are not saving because they fear losing money in the current volatile market conditions.
The figure is extrapolated from findings in the company’s Saving Inhibition report, which collected data from over 1,000 UK consumers, looking at eight specific drivers of savings rates across different demographic segments.
CoreData Research UK consultant Jorge Retana said that the findings pointed to growing concern among those surveyed.
“This was likely spurred on by the continuing eurozone crisis, evasive growth prospects and the short-lived periods of stock market hype followed by steep falls, as significant influential factors that prevent people from saving for their retirement.”
“The persistence of market volatility could also be changing savers’ perception of financial markets. Individuals could start considering volatility to be an inherent market characteristic rather than a temporary phenomenon.”
Financial services generally in the UK also face headwinds in the form of local mis-selling scandals – such as that involving payment insurance – which have lead to a reduction in trust among consumers. The ratio of those who say they are discouraged from saving by lack of trust has hit 44.7%. That is significantly up from 39.4% reported a year ago.
Over 24 million people in the UK are not saving enough, according to other figures cited. CoreData points to eight factors that inhibit savings: market volatility and lack of trust, and a real or perceived sense of lack of available funds to save, lack of financial literacy, apathy, cost expectations, and a preference to spend rather than save. However, it added that the lack of disposable income is the main inhibitor, with more than half the population (50.5%) suggesting they are unable to save because they do not feel they have enough money to do so.