FINANCE - WEALTH MANAGEMENT

Market view

Savings as a legacy of the pandemic



38% of Europeans saved more than expected in 2020 due to the pandemic Photo: Shutterstock

38% of Europeans saved more than expected in 2020 due to the pandemic Photo: Shutterstock

In the 2021 edition of its Global Investor Study, Schroders believes that the focus on savings and financial wellbeing is likely to be a lasting legacy of the pandemic.

For its Global Investor Study Schroders surveyed 23,000 people in 32 countries and 46% of respondents said they will save more once pandemic restrictions are lifted. This sentiment is more pronounced among investors aged 18 to 37 than the average.

This cautious approach is also reflected in investors’ retirement prospects. More than half (58%) of retirees worldwide are now more cautious about spending their retirement savings, while 67% of those still working want to save more for their retirement.

The survey also found that 74% of investors worldwide have spent more time thinking about their financial wellbeing since the pandemic, with those who consider themselves to be seasoned experts being the most concerned. This is particularly pronounced in Asia. Finally, investors worldwide are now more likely to check their investments at least once a month, at 82% compared to 77% in 2019.

Europeans saved more than planned

“The pandemic has increased our sense of uncertainty and challenged our ability to understand risk, which for many of us translates into greater anxiety and a sense of loss of control. These feelings are clearly reflected in the results of our research, with investors increasingly focusing on saving, monitoring pension contributions and checking their investments more frequently,” said Wim Nagler, sales director for Belgium and Luxembourg at Schroders.

Nagler welcomed the fact that the pandemic has led to a greater emphasis on financial planning and financial wellbeing in general worldwide.

In 2020, 32% of investors around the globe saved more than they had planned. This is due to a reduction in non-essential spending, such as dining out, travel and leisure. In Europe, this proportion reached 38%, compared to 28% in Asia and 27% in the US. Of those investors who were unable to save as much as expected, 45% of respondents cited a decline in their business income as the main reason.

Investors in the US, the Netherlands and the UK are most likely to increase their spending once lockdown measures are lifted. In contrast, the most cautious investors are in Japan, Sweden and Hong Kong.

This story was first published on Paperjam. It has been translated and edited for Delano.