Half of all UK investors are failing to reach their financial goals, leading 35 per cent of Brits to take on more risk over the past year.
New research by online investment platform SyndicateRoom and FTI Consulting found that 48 per cent of retail investors consider themselves to be ‘off track’ when it comes to meeting their financial goals, with the figure rising to 53 per cent among millennial investors.
As a result, 68 per cent of those surveyed said that they would be willing to take on riskier investments such as cryptocurrencies and start-ups, if it increased their chances of stronger returns. Among millennials, this figure rose to 88 per cent.
“The low-yield economic environment is having serious effects on the nation’s ability to reach its financial goals,” said Gonçalo de Vasconcelos, chief executive and co-founder of SyndicateRoom.
“It’s deeply worrying that increasing numbers of investors are failing see the returns they expected – and with millennials suffering most, the wealth creation of a whole generation is at stake.”
“With a diversified portfolio of early-stage equities recognised as one of the avenues helping investors meet their financial goals, I call upon the whole of the industry to tear down the barriers.”
Equities, bonds and residential property were the most popular asset classes for investors over the past year, and two thirds (65 per cent) of investors said that they believed a diversified portfolio of early-stage equities would help them achieve their financial goals in the long term.
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However, despite the widespread acceptance of risk, awareness of the tax-relief schemes designed to encourage risk-taking investors (VCT and EIS) are falling.
Awareness of Venture Capital Trusts (VCTs) dropped to 69 per cent, down from 77 per cent in 2016, while awareness of the Enterprise Investment Scheme (EIS) fell from 59 per cent in 2016 to 55 per cent.
“The Chancellor Philip Hammond must do more to promote VCT and EIS investments,” said de Vasconcelos.
“Not only are they instrumental to helping a generation of investors reach their goals, they’re also the lifeblood of Britain’s entrepreneurial businesses, which drive the economy’s job creation and productivity.”