Yahoo Finance Meagre savings rates push Brits to hunt harder for returns
In search of a return on their investments, Brits are heading to the stock market and more esoteric places to get returns on their cash.
As the Bank of England has held interest rates at a record low of 0.1% throughout the pandemic, and inflation has hit 2.5%, to avoid the value of their money depleting people are investing in crypto, collectables and the real estate market in the hope of cashing out.
Data given exclusively to Yahoo Finance UK from NexGen Cloud showed that 43% of UK investors are now more likely to consider alternative investments because of record low interest rates.
From a sample of 889 investors, all of whom have portfolios in excess of £10,000, not including any primary property, savings, pensions or SIPPs, the analysis found a fifth of current portfolios are weighted more towards alternative investments than traditional assets.
23% said alternative investments will form a key part of their financial strategy in the coming 12 months.
Real estate is the most common alternative investment among this crop of UK investors – 17% hold real estate investments at present, with a further 19% considering investment into this asset over the next year.
Cryptocurrencies and collectibles were joint second on the list of the most popular alternative investments (both had backing from 14% of investors).
Elsewhere, NexGen Cloud’s research found that 8% of UK investors have invested in cloud computing infrastructure or data mining, with 18% considering this sector as an area for investment in the year ahead.
Watch: What are negative interest rates?
Chris Starkey, founder and director, NexGen Cloud, said: “Over the past 18 months, the financial markets have been subject to intense volatility, which combined with record low interest rates, is evidently leading investors to diversify into new areas beyond mainstream assets.
“Investors have never had so much choice of how and where to invest their money. Our research shows that many are now embracing the possibilities by finding investments within their areas of expertise or industries they are passionate about.”
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A separate analysis showed, from Google Play Store data, that the top 10 UK investments apps have gained an estimated 1.6 million more users since March 2020.
These included traditional investment choices such as Hargreaves Lansdown as well as fintechs Plum, Nutmeg and Wealthify.
Plum saw 382,000 new users - a 80% increase. Freetrade was close behind with 319,500 new customers via the Play Store.
App Radar’s analysis also revealed that the growth shows no sign of slowing with 140,000 new users added in May 2021 alone.
The growth in the UK tracks a general global surge in the investment app market with Robinhood and eToro leading the way with an estimated 8.2 million and 6.5 million new app users respectively.
“We are seeing a seismic shift in how people manage their money in the UK. Gone are the days where investing was for a select wealthy few," said Thomas Kriebernegg, CEO & co-founder, App Radar.
"Now, because fintech companies have significantly lowered the bar to entry, more and more people are taking direct control of their finances."
Watch: What are the risks of investing in cryptocurrencies?
