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Survey: UK investors expect COVID to crash the stockmarket – AGAIN!


A new, in-depth survey of 1,000 UK adults with a combined £109,779,115 in investable assets (ranging from £52,000 to £1million, with an average of £188,948), has revealed how the economic impact of COVID-19 has affected both the value of investors’ portfolios and their confidence in the future.

The research from Bancroft Wealth, the flat-fee wealth manager, found that pessimism about the economy has left investors feeling that there is nothing they can do to influence their future portfolio returns. As a result, the majority have done nothing to address their financial situation and just one in 10 had been in contact with an adviser.

UK investors: this recession will be worse than 2008

It’s hardly surprising, then, that 44% of investors are expecting a deeper and longer recession than the one caused by the financial crash of 2008, and 61% expect that a second wave of COVID-19 will cause a stock market crash.

While there are pockets of cautious optimism among investors for a post-COVID-19 economic recovery, they remain overwhelmingly downbeat:

  • 58% don’t believe any recovery will happen for a ‘number of years’,
  • Just over a fifth (21%) believe that the market will recover within a year,
  • A third (33%) think that the UK economy will be worse affected than other countries,
  • One fifth (19%) believe that the UK will fare better than others.

When it comes to investors’ personal circumstances the survey revealed that, for those whose investments have been negatively impacted by COVID-19, their average loss was 19%. A fifth (19%) saw their investments drop in value by between 21% and 30%, and one in 10 suffered a drop of at least 41%.

Bancroft Wealth: UK investor confidence has been “rocked”

Asked how they think their portfolios will perform in the future as a result of the pandemic, investors were cautious if not pessimistic. A third (30%) think that their investments will take at least five years to get back to their pre-pandemic values, while one in ten (9%) think it’ll take at least ten years. And alarmingly, almost one in 10 (8%) think that their investments will never recover.

Despite all this, only 10% of investors have had any form of contact with a financial adviser since COVID-19 hit and most (58%) have taken no action to address their financial situation, for example changing the asset allocation of their portfolio or moving investments in or out of cash

Keir Ashman, pensions and investments specialist at Bancroft Wealth, said:

“With the ONS reporting that April saw the largest monthly fall in GDP since records began, and global stock markets having suffered precipitous falls earlier in the pandemic, it’s hardly surprising that investors have had their confidence rocked by COVID-19 and the knock on effect that lockdown continues to have on the economy. It’s also clear from our survey that investors have experienced a great deal of turmoil with their personal wealth in recent months, leaving many unsure what to think, how to feel or what to do. All too often this has led to inaction, whereas there are actually steps that can, and should, be taken.”

While no-one can predict what will happen in the future, by working with a professional financial adviser investors can at least plan for different eventualities and diversify your portfolio in such a way that you limit your exposure to risk, while ensuring your life goals are still met.

With just one in 10 investors having sought advice during the pandemic, Bancroft’s Ashman urged the 90% who haven’t to do so sooner rather than later.

“If you already have an adviser, drop them a line,” he said. “Don’t wait for the unnecessary, annual, face-to-face meeting that many traditional advisers favour. Better yet, find a modern wealth manager…that is geared up to help you remotely, via phone or online, so you can access the support you need, when you need it.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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