The report commissioned by the Pensions Institute at Cass Business School revealed that 52% of respondents show an attitude of “reckless conservatism” when it comes to investing, meaning they would prefer to miss their savings goals as long as they don’t have to take increased investment risk, even in the short term.

It found a disconnect among savers between short term savings, long-term investments and the risk of falling short of planned saving goals.

This means, the report suggested, that people become reluctant to take the action required if their savings fall short of their targets, for example after an unexpected life event

Regardless of attitude to risk, most savers said they would be “very uncomfortable” if they sustained investment losses of more than 10%. This included affluent savers who claimed to be adventurous in their attitude to risk. Around 20% would be willing to accept investment losses of 20% or more.

The report said: “People should be encouraged to understand that risk is an unavoidable feature of long-term savings plans and that, if they want to meet their savings goals on time, they need to be prepared to either take controlled investment risk or save a great deal more in low-risk investment vehicles which are actually not riskless once inflation is taken into account.”

A different approach to recommending products and advising clients could help re-focus clients’ minds into prioritising saving goals over risk or decreased spending, said Professor David Blake, who is the director of the Pensions Institute and worked on the study.

“There need to be better designed investment products, with clear risk objectives, which can be aligned with savings goals and risk appetites of different savers,” he added.