More consumers took time to review their finances and invest during the Covid crisis, research has showed.
A survey commissioned by behavioural finance experts Oxford Risk has revealed that 45 per cent of people said the pandemic gave them more time to review their savings and investments, while 53 per cent said it has made them think more about their finances and those of their loved ones.
23 per cent of the 1,036 UK adults surveyed said they thought it was a good time to invest when markets fell at the beginning of the the pandemic. 25 per cent said they had excess money to invest because of the crisis, compared to 48 per cent who did not.
Nearly one in five adults (18 per cent) said they have invested more money into stock market related products during the pandemic than they would normally have done, compared to just five per cent who have invested less.
Meanwhile, 13 per cent invested the most into their pension fund, with six per cent saying they put all their extra investment into their pensions.
28 per cent said it all went into accessible investment accounts such as equity ISAs, and 27 per cent said most if it was invested in this way.
A quarter (26 per cent) said it was evenly split between their pension fund and more accessible investment vehicles.
“The coronavirus crisis has meant that more people have reviewed their finances, and in many cases having spent less during various lockdowns, they have actually invested more than they would normally,” said Greg Davies, PhD, head of behavioural finance at Oxford Risk.
“However, trying to predict when markets represent the best opportunity to invest is very difficult to get right.
“We estimate the cost of the ‘Behaviour Gap’ – losses due to timing decisions caused by investing more money when times are good for stock markets and less when they are not – i.e. buying high and selling low – is on average around 1.5 per cent to two per cent per year over time.”