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Experienced Investor

Investing boom continues as Brits stick to lockdown savings habits

Emma Lunn
Written By:
Emma Lunn

Three quarters (76%) of UK investors plan to continue their lockdown investing habits, despite the loosening of restrictions, according to Barclays Smart Investor.

A poll by the investment platform suggests that the recent boom in retail investing is here to stay. It found that the average UK investor plans to invest 19% more each month post-lockdown, rising to 36% for younger investors.

Barclays found that even with the long-awaited arrival of ‘Freedom Day’, appetite to invest is unlikely to dip in the months ahead; half of UK investors (50%) plan to cut back on other spending so that they can continue to invest the same amount or more than in lockdown.

Only 6% of UK investors plan to reduce their monthly investments, citing holidays, weekends away, days out and eating out at restaurants as the top reasons.

Clare Francis, director of Barclays Smart Investor, said: “Today’s findings show just how much the pandemic has changed our approach to saving and investing. As new investors flocked to the stock market last year, it was easy to assume that it was just a lockdown hobby, and that many would go back to their old spending habits when the world re-opened.

“Whilst we’ll undoubtedly see a boost in spending across the UK, as people make the most of their new-found freedom, it’s great to see so many investors looking to keep a healthy balance between spending for today and investing for the future.

“The prediction that many will continue or increase the amount they invest going forward is likely driven by a rise in lockdown savings, with the ONS reporting that UK household savings are nearing an all-time high. If you’ve been lucky enough to boost your savings under lockdown, it’s worth considering whether investing is right for you – over the longer term, stock markets tend to perform better than cash and, while you won’t lose money by leaving everything in a savings account, with interest rates where they are, your spending power could fall because of the impact of rising inflation.”

Golden rules for successful investing

Make sure you have a good cash savings buffer

There’s no hard and fast rule but it’s good to have at least three months’ salary in cash in a savings account to cover any short-term needs or unexpected costs.

Invest with the long-term in mind

Try and commit for at least five years to give yourself the best chance of riding out any dips in the market.

Reduce your risk through diversification

Spread your money across various companies, regions and industries, as this will help reduce the risk.

Don’t over-trade or check your portfolio too often

It can be tempting to check your portfolio on a regular basis but experts will usually recommend the opposite – if you sit back and take a ‘buy and hold’ approach, you won’t make any panicked decisions.

Invest little and often, through regular payments

Rather than manually making a monthly transfer into your investment account, set up a direct debit or a regular investment each month.

Make the most of your tax allowances

You can invest up to £20,000 a year in an ISA without paying tax on the returns. Getting your money invested early could help you to maximise any returns, as you’ll benefit from having extra time for your money to grow.