2022
9
UK Consumers and Investing Market Report 2022
2022-11-24T03:04:16+00:00
OX1100523
2195
157886
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Report
en_GB
“The short-to-medium term outlook for UK investors is extremely challenging. Such an environment increases demand for advice, guidance and good quality sources of information. Investment providers, platforms and intermediaries need…

UK Consumers and Investing Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Consumers and Investing Market Report 2022 identifies consumers’ attitudes towards consumer investment in the UK, the impact of inflation on UK consumer investment, and future opportunities for consumer investment brands. This report covers the UK consumer investment market size, market forecast, market segmentation and industry trends for consumer investment in the UK.

UK Consumer Investment: Current Market Landscape

Mintel’s consumer investments report shows that both the value of fund sales and assets under management fell in 2022. Our consumer investment market research identifies heightened uncertainty and rising inflation as the cause limiting people’s ability to save and for consumer investment activity cooling down. The turmoil in the currency and crypto markets have caused many investors to rethink or put their investment plans on hold. In addition, political upheaval and concerns over the UK’s financial stability have exacerbated volatility in domestic markets.

While Mintel’s consumer investment market research shows there remains a good appetite for investment among retail investors, confidence has plummeted during the second half of 2022. In contrast to the previous two years, which saw strong and record inflows into the retail fund sector, the UK consumer investment market forecast for 2022 is set for record outflows.

UK Consumer Investment Market Forecast

Mintel’s UK consumer investment market forecast predicts a continuation of recent trends, including higher interest rates, high inflation, and market turbulence. UK consumer investment experts say a recession in the UK as well as a global downturn are highly likely, causing consumer investment activity to subdue as investors take stock.

However, our consumer investments report suggests that some investors will look to restructure portfolios, boosting demand for advice. According to UK consumer investment market research, activity will start to pick up as investors seek to take advantage of lower prices and markets start to recover.

  • UK Consumer Investment Market Share: 26% of adults in the UK hold some form of investments.
  • Investment Consumer Behaviours: Over half of investors describe their approach to investment risk as balanced or moderate. 61% of UK investors prefer to choose investments that offer medium risk to capital.
  • UK Consumer Investment Market Size: NFTs hold a relative small share of UK consumer investment market size. 5% of UK adults own cryptocurrencies and NFTs.
  • Consumer Investment Market Opportunities: 30% of investors have arranged investments through an adviser, emphasizing opportunities for brands to offer their customers more support when making investment decisions.

Future Trends and Opportunities in UK Consumer Investment

Consumer investment market research predicts that once the economy and financial markets recover and strengthen, the appetite for retail investment will increase again. Moreover, sales and funds under management will grow strongly off the back of renewed optimism and improved performance.

There is an opportunity for mainstream consumer investment providers and platforms to attract customers, who will be keen to find an alternative and less risky home for their money. Demand for guidance and advice is also set to increase, with some investors needing reassurance or help to keep their investments on track. Mintel’s UK consumer investment market forecast also highlights rising opportunities to attract new-to-market investors, with ongoing digital developments enhancing customer access and functionality.

To discover more about consumer investment in the UK, take a look at our extensive UK Investments Market Research.

Quickly Understand

  • The recent performance and medium-term outlook of the UK consumer investment market.
  • People’s appetite for and ability to save/invest in light of increased turbulence, high inflation and rising interest rates.
  • What types of investment accounts and assets do investors hold?
  • Which investment platforms/apps have investors used?
  • How investor confidence and experience effects investment choice, objectives and buying behaviour.
  • Consumer investment intentions over the coming year.

Covered in this Report

Brands: Hargreaves Landsdown, Barclays, Fidelity, Freetrade, eToro, Halifax, Vanguard, DEGIRO, Santander, Trading 212, AJ Bell, Interactive Investor, Nutmeg, HSBC, Bestinvest, Wealthify, Moneyfarm, IG.

Expert Analysis from a Specialist in the Field

This report, written by Sarah Hitchcock, a leading analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends in UK consumer investment, and adds expert context to the numbers.

The short-to-medium term outlook for UK investors is extremely challenging. Such an environment increases demand for advice, guidance and good quality sources of information. Investment providers, platforms and intermediaries need to support investors through this difficult period by bolstering consumer understanding via excellent communications, tools and disclosure.

Sarah Hitchcock

Senior Financial Services Analyst

 

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Report scope and definitions
  2. Executive Summary

    • The five-year outlook for the retail investment market
      • Figure 1: Outlook for the retail investment market, 2022-27
    • The market
    • Retail funds under management reached £1.6 trillion in 2021 but have since fallen
    • Fund sales decline in 2022 as rising volatility and economic uncertainty hit confidence
      • Figure 2: Forecast of gross retail investment fund sales – Fan chart, 2017-27
    • Investors show greater willingness to adopt a global diversification strategy
    • Many consumers are feeling the strain of rising inflation
    • Regulatory developments
    • 42% of investors have used a platform to trade or arrange their own investments…
      • Figure 3: Channel used to arrange/buy investments, 2022
    • …and 7% have bought a readymade portfolio
    • Companies and brands
    • An increasingly crowded market
      • Figure 4: Investment platform or trading app used within past two years, by DIY/guided investors, 2022
    • Many investors use multiple platforms
    • The consumer
    • Two thirds of adults have a cash savings product…
    • …while around a quarter own investments
      • Figure 5: Ownership of savings and investment accounts, 2022
    • Cryptoassets have exploded in popularity among under-35s
      • Figure 6: Types of investment held by retail investors, 2022
    • Confidence comes with experience
      • Figure 7: Segmentation of investors by combined level of confidence and experience, 2022
    • More than half of investors are seeking long-term growth
      • Figure 8: Primary investment aim, 2022
    • Mismatch in risk profiles and investment activity
      • Figure 9: Attitude to risk, 2022
    • 55% of investors do their own research before investing
      • Figure 10: Investment behaviours and influences, 2022
    • More intend to buy than sell investments over the coming year…
    • …though many could postpone or change their plans
      • Figure 11: Intentions to buy, sell or switch investments over the coming year, 2022
    • Over 5 million prospective investors are waiting in the wings
    • 44% plan to seek advice, and 35% intend to buy a readymade portfolio
      • Figure 12: Intentions to use an investment platform, seek advice, invest in responsible investments and buy a readymade portfolio within the next 12 months, 2022
  3. Issues and Insights

    • Social trading and crypto markets attract younger investors…
    • …at least some of whom could switch to funds
    • Investors need reassurance in these uncertain times…
    • …and will be more willing to seek advice
  4. Market Size and Performance

    • Net retail fund sales rose strongly in 2021…
    • …but are set to fall sharply in 2022 as sentiment falls
      • Figure 13: Gross and net retail investment fund sales, 2016-22
    • The value of funds under management has fallen from their December-2021 peak
      • Figure 14: Retail investment funds under management, 2012-22
  5. Market Forecast

    • Market turmoil spooks investors, suppressing activity
      • Figure 15: Outlook for the retail investment market, 2022-27
    • Uncertainty creates opportunity for investors with a long-term view
    • Conditions will remain tough in 2023, with a rebound more likely in 2024
      • Figure 16: Market forecast for gross retail investment fund sales, 2017-27
    • Learnings from the last income squeeze
      • Figure 17: Gross and net retail unit trust and OEIC sales, 2007-11
    • Forecast methodology
  6. Market Segmentation

    • Pandemic era saw greater inflows into equity, bonds and mixed asset classes…
      • Figure 18: Net retail fund sales, by asset class 2019-21
    • …with equity appreciation driven by overseas funds
      • Figure 19: Retail funds under management, by asset class 2016-21
    • Sales of tracker funds were stable in 2021
      • Figure 20: Net retail tracker versus actively managed funds sales, 2020-21
    • Responsible investments experience strong growth
  7. Channels to Market

    • DIY investment platforms and apps are very popular with retail investors
    • Guided services are also growing in prevalence
      • Figure 21: Channel used to arrange/buy investments, 2022
    • A large minority of investors have used an investment intermediary
      • Figure 22: Channel used to arrange/buy investments, 2022
    • Platforms dominate the sale of retail funds
      • Figure 23: Gross retail investment fund sales by distribution channel, 2016-21
  8. Market Drivers

    • Recession looms and uncertainty grows
      • Figure 24: Average quarterly changes in the Bank of England Base rate and CPI, Q1 2019-Q3 2022
    • Higher borrowing costs and high inflation reduces people’s capacity to save
    • Many people are feeling less well off
      • Figure 25: Household financial wellbeing index, 2016-22
    • Market turbulence and uncertainty increases the need for guidance and advice
    • Regulatory focus shifts onto platform charges…
    • …and high-risk investments
  9. Leading Investment Platforms

    • Investment platforms come in many guises…
    • …but can be broadly separated into two groups
    • Hargreaves Lansdown remains the largest D2C platform in the UK
    • Multi-platform/app use is common
      • Figure 26: Investment platform or trading app used within past two years, by DIY/guided investors, 2022
  10. Competitive Strategies and Innovation

    • The rise of social trading…
    • …and new fintech brands
    • AJ Bell launches a new investment app
    • M&G takes a stake in Moneyfarm and plans to roll out its own guidance platform
    • Readymade portfolios are becoming more prevalent and popular
    • Bridging the gap with ‘model’ portfolios
  11. Types of Investments Held

    • Over a third of UK adults have £10,000 or more in cash savings
      • Figure 27: Level of investible assets, 2022
    • One in five people with savings below £10,000 have investments
    • Opportunities to expand investment ownership
      • Figure 28: Ownership of savings and investment accounts, by level of cash savings, 2022
    • 20% have an investment ISA
    • Take-up of stocks and shares ISAs has grown strongly over the past decade
    • 5% have a general investment account
    • 6% have a share dealing or trading account
    • Cryptoassets have become hugely popular with young investors
      • Figure 29: Types of investment held, 2022
    • One in seven investors has no idea what investments they hold
  12. Investor Confidence and Experience

    • Confidence comes with experience
    • Female investors aged 55+ need more support to make the right choice
      • Figure 30: Level of investor confidence and experience, 2022
    • Experienced investors are generally confident investors
      • Figure 31: Segmentation of investors by combined level of confidence and experience, 2022
    • Experienced investors have the most diversified portfolios
      • Figure 32: Types of investment and investment account held, by investment experience and confidence, 2022
  13. Investment Aim and Attitudes to Risk

    • Most retail investors are seeking long-term growth
      • Figure 33: Primary investment aim, by level of experience, 2022
    • Readymade portfolios permit a ‘set and forget’ approach to investment
    • Most investors have a low-to-moderate risk tolerance
      • Figure 34: Attitude to risk, by level of confidence and experience, 2022
  14. Investment Buying Behaviour

    • 55% of investors always do their research before investing…
      • Figure 35: Investment behaviour, by risk profile and level of experience, 2022
    • …while 9% often invest on impulse
      • Figure 36: Investment buying behaviour – Cross-analysis, 2022
  15. Investment Intentions

    • More people intend to buy investments than sell them…
    • …though many could alter direction as uncertainty grows
      • Figure 37: Intentions to buy, sell or switch investments over the coming year, 2022
    • A large group of would-be investors are waiting in the wings
      • Figure 38: Non-investors’ likelihood of investing in the future, 2022
    • 44% intend to seek professional advice
      • Figure 39: Intentions to use an investment platform, seek advice, invest in responsible investments and buy a readymade portfolio within the next 12 months, 2022
    • Interest in responsible investments remains strong, especially among under-45s
      • Figure 40: Intentions to use an investment platform, seek advice, invest in responsible investments and buy a readymade portfolio within the next 12 months, by existing and prospective investors and level of experience, 2022
  16. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  17. Appendix: Forecast Methodology

    • Market forecast
      • Figure 41: Market forecast for gross retail investment fund sales, 2017-27
    • Forecast prediction intervals
      • Figure 42: Market forecast and prediction intervals for gross retail investment fund sales, 2017-27
    • Market drivers and assumptions
    • Forecast methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted. Our reports are available to download in PDF and PPT formats.

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