One of the less obvious impacts of the COVID-19 pandemic has been an increase in the number of people who are now taking an interest in stock market investing. Online brokers and apps have seen demand surge, as locked-down individuals seek to profit from the economic changes we have seen over the past 12 months.
This trend has been fuelled by the growth in cash held by those whose income has remained largely unchanged while outgoings have fallen as a result of working from home. With interest rates on savings accounts virtually zero, many people are looking to put their money to work. Indeed, the Office for Budget Responsibility – a public body funded by the Treasury – estimates that households now have savings of around £180bn, and as much as 60% of that is sitting in accounts that pay virtually no interest.
Cash savings are generally higher among younger people – understandable given that many are setting it aside with the hope of building up enough to put down as a deposit on a house.
For those whose plan is to build an emergency fund rather than save for a specific purpose, this is a good time to consider the options. There’s a general rule of thumb that everyone should have instant access to enough money to cover living expenses for several months.
Beyond that, it’s worth considering how to generate higher returns. If you would like to consider your options for wealth management in Shropshire, give us a call.