In the coming 12 months, UK investors will look to diversification, ISAs and investments offering fixed returns as they seek to manage their ongoing concerns about the health of the UK economy, new research from Shojin has revealed.
The FCA-regulated investment platform commissioned an independent survey among 2,000 UK adults, of which 964 have investment portfolios worth in excess of £10,000 – this includes all forms of investments but discounts their savings and property used as a primary residency.
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The research found that two thirds (65%) of UK retail investors have adapted their investment strategies to rising interest rates and high inflation over the past 12 months. But economic fears remain, with 55% worrying that the UK economy entering a recession would negatively impact their investments.
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When looking forward to the next 12 months, almost two in five (38%) retail investors will diversify their investment strategy, while 53% plan to keep their investment strategy largely the same as it has been throughout 2023.
Elsewhere, Shojin’s research showed that 57% of UK retail investors will prioritise investments that offer set returns within an agreed time period. Two thirds (67%) plan to increase the amount of money they have saved in ISAs.
Jatin Ondhia, CEO of Shojin, said: “Our research shows that while UK investors are navigating the complex financial landscape with adaptability and resilience, concerns still linger about the state of the national economy. Understandably, many are likely to take a low-risk approach over the next 12 months. Meanwhile, it’s positive to see a growing number of investors taking proactive steps and beginning to diversify their portfolios.”
The research also highlighted the prominent role technology will play in retail investors’ strategies, with 40% planning to increase their use of apps and online platforms to manage investments directly.
“Each investor must assess their appetite and ability to manage risk,” Ondhia added. “As part of this calculation, they ought to consider diversification, which can act as a shield against market volatility and offer a hedge against uncertainties.”
As we move forward, there is a sense of cautious optimism – most (57%) UK investors think the worst of the economic turbulence from the past 18 months has now passed.
“Clearly, the government needs to rebuild trust in the state of the economy,” Ondhia concluded. “But investors must remain in control of their decisions; they have to ensure they’re making choices that align with their risk tolerance and long-term goals. It will be fascinating to see how the investment landscape continues to involve in the months to come.”
Shojin said data sample of 2,000 UK adults is fully nationally representative. This means the sample is weighted to ONS criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole. Within this sample, 964 respondents had investment portfolios worth in excess of £10,000 – this includes all assets from bonds and currencies to commodities and stocks and shares but excludes any savings or property that is used as their primary residency.
