30.11.2007
Dramatic drop in investor confidence, according to Wave 10 of Standard Life Savings & Investment Index
The most recent wave of research from Standard Life has shown a significant fall in confidence in the savings and investment market.
The overall score in Wave 10 of the Standard Life Savings and Investment Index has decreased significantly since last wave, plummeting from 20 down to 11. This matches the previous all time low recorded in July 05 when research first began. It reflects a marked change in sentiment towards property and stocks and shares in particular.
Investment in one’s own property has always been the most popular class by a clear margin since Standard Life first conducted its research. In October last year, it stood at a high of 62 points. It still has top place, but has dropped 48% from 46 points in July 07 to 24 points today, edging much closer to more basic savings categories such as cash and short term deposits at 20 points.
Buy to let property has suffered an even sharper drop, tumbling from 23 points in July to 0 now. In October last year, buy to let stood at 41 points. Stocks and shares are now the least popular choice, hitting a lowest ever Index score of -10.
ISAs remain the top choice of investment vehicle, with occupational pension schemes, personal pensions and SIPPs continuing to take second, third and fourth places.
Trevor Matthews, Chief Executive, UK Financial Services, Standard Life said, “These are dramatic results. It’s clear that the recent credit crunch and market volatility have affected people’s confidence. Our research shows that there is now a substantial veering towards the less risky cash and short term deposits. At a time like this I believe it is important to remind people not to lose sight of the big picture and to continue to adopt a long term perspective about assets such as property and stocks and shares."
Of those who are saving, it is clear that the current market uncertainty has affected their intentions. The research data shows that the number of people saying that they plan to save less has increased (up from 9% to 11%); the lowest ever number say that they intend to save more over the coming year (31%); and the highest ever number say that they intend to save the same (45%).
More worryingly, 45% of people are not saving at all.
Trevor Matthews commented, “45% of people aren’t saving for their future. That’s a concern, especially when you add to that the fact that the UK has the highest personal debt levels in Europe. I feel strongly that as an industry, we must work to make it as easy for someone to save as it is for them to borrow.”
- Ends –
View Overall Index graph
Media enquiries please contact:
Lesley Davidson, PR Consultant
Standard Life Assurance Limited
Direct: 0131 245 6087
Mobile: 0773 497 4190
Email: lesley_f_davidson@standardlife.com
Yvonne Savage, PR Manager
Standard Life Assurance Limited
Direct: 0131 245 0476
Mobile: 0771 248 6331
Email: yvonne_savage@standardlife.com
Notes to Editors
1. The Standard Life Savings and Investment Index is a quarterly survey measuring consumer sentiment for investment classes and savings vehicles.
2. The research was carried out by Canvasse Opinion from Experian using a quantitative online methodology. The most recent wave of fieldwork took place between 12th and 22nd October 2007 with an overall sample size of 1520. Based on all responses, this sample size allows us to comment on significant differences where there is a +/- 3% variance wave on wave. Interpretation and analysis of results were carried out by the Customer Research Department at Standard Life.
3. To arrive at the overall Index score, respondents are asked “On a scale of 1 to 5, where 1 = very bad and 5 = very good, please consider the following list of investment categories and tell me whether you feel it is a good or bad time to invest in this way for your financial future:
- Cash/basic savings accounts,
- Notice account,
- Stocks and shares
- Bonds (Premium, National Savings),
- Property – investment in own home/renovation
- Property – buy to let
- Alternative Investments (Gold, Fine wine, Antiques)
The Index scores are calculated by removing those who state ‘don’t know’ then taking the remaining respondents’ base scores (including those stating ‘OK’), adding the good/very good figures and subtracting those stating bad/very bad.
4. When asked if it was a good time to invest in a list of various investment vehicles (including pensions), the favourable responses were calculated by adding together the percentages of people who answered “very good”, “good” or “OK”.
5. Copies of the full report are available in PDF format on request.
6. Standard Life has approximately 7 million customers worldwide and provides an extensive range of products and services, aimed at meeting the financial requirements of customers throughout their lives.