European Investors Plan Through Uncertainty
-35% of monthly income contributed to saving and investing-
European investors save and invest more than 35% of their household income each month - more than three times the amount they set aside to service debt – according to new research from Schroders.
Despite the economic uncertainty across Europe, the new research reveals underlying financial strength amongst affluent investors, with many prioritising the importance of saving and investing for the future. When asked how they allocate their household income in a typical month, the average European investor spends 53%, saves and invests 35% and allocates 11% to servicing debts.
The findings are from the Schroders European Wealth Index, an annual study, which tracks the investment attitudes and habits of 1,341 affluent investors across 12 countries. The affluent investor was defined as someone with invested assets, excluding primary residence, of €60,000 (or the equivalent amount).
With investors allocating a substantial amount of their resources to saving and investing, Schroders also explored the specific situations and life goals that have motivated investors to put a financial plan in place. Overall, 80% of respondents had a least one specific financial plan in place and the most common drivers were building up a pension (41%), having an emergency fund to deal with life’s uncertainties (38%), funding hobbies and interests (20%) and retiring early (19%). The least common motivations across Europe for putting together a financial plan included paying for childcare and nursery fees (6%), preparing for a change of career (6%) and funding care for elderly relatives (7%).
In every European country surveyed, at least 65% of affluent investors said they had put a financial plan in place for a specific purpose. This figure peaked in the UK (95%), France (87%) and Israel (85%). Whilst the level of engagement with financial planning was high across the board, there were some notable country-by-country variations when it came to perceived priorities.
- Investors in the UK (57%) and Sweden (49%) were most likely to plan to build up a pension. Investors in these countries were also the most likely in Europe to want to build up an emergency fund to deal with life’s uncertainties (Sweden 54%, UK 50%).
- The cost of education and university was most likely to encourage affluent investors in Israel and Portugal to put a financial plan in place (36% and 25% respectively) whereas investors in France (8%) and Sweden (8%) were the least likely.
The Schroders research also suggests there is a resurgent investor appetite to engage the help of professional financial advisers. Across Europe, 65% of investors said they would be looking to engage expert financial advice in the year ahead.
Peter Beckett, Head of International Marketing at Schroders, commented:
“People are having to react to on going market uncertainty but our research indicates that affluent investors across Europe are saving and investing a significant proportion of their resources, suggesting many are able to juggle day to day costs with the need to make plans to meet long-term goals. However, one cause for concern is that in most of the countries surveyed, investors are tending to save more than they invest. Given low interest rates in many countries it means that savings rates are often not even keeping up with inflation and many investors could make their money work harder by considering a range of income-generating investment options.”
For further information please contact: Georgina Robertson, International PR, Schroders 0207 658 6168 firstname.lastname@example.org
Notes to Editors
Additional tables are available upon request. The research was undertaken by YouGov in April 2012 among a representative sample of 1,341 affluent investors spanning 12 European countries. These included Germany, Austria, Sweden, Switzerland, Spain, Netherlands, Belgium, Italy, France, Portugal, Israel and the UK. The affluent investor sample was defined as people with invested assets, excluding primary residence, of €60,000 (or the equivalent amount).
The survey questions of allocation of income asked investors to think about their current total household income and to indicate what proportion they spent (including monthly outgoings such as rent, socializing, bills and shopping), saved (in savings or deposit accounts), invested (into financial products, property or into a pension) and also the amount they allocated to service debts (credit cards, loans and mortgage payments). Respondents were asked to write a percentage next to each of these four options relating to the last month (adding up to 100%).
Schroders is a global asset management company with £199.6 billion (€238.9 billion, $310.1 billion) under management as at 31 March, 2012. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 33 offices in 26 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
Further information about Schroders can be found at www.schroders.com.
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