Investors view rising inflation and low interest rates as more of a threat to their wealth than Brexit, according to a survey of over 1,000 UK savers and 500 high net worth individuals commissioned by Rathbone Investment Management.
Over 40 percent (42 percent) of investors surveyed considered the prospect of rising inflation as a major threat, and the same number believed consistently low interest rates were a key concern. By comparison, just 30 percent saw Brexit as one of the biggest obstacles to building and maintaining wealth.
Nearly 70 percent of investors surveyed claimed not to consider Brexit as a substantial threat to their finances. This suggests that most investors are confident that they have taken or can take the necessary steps to mitigate any future economic uncertainty, Rathbones said.
By contrast, the spectre of mounting inflation has raised concern for many investors - particularly those who hold a substantial amount of wealth in cash. Of those surveyed, just over a quarter (26 percent) said they had already been negatively affected by the rising rate of inflation and a further one in five (21 percent) were concerned that it would impact them in the near future. Conversely, one in ten (10 percent) believed their finances had been positively impacted by the rise in inflation.
Additionally, nearly a fifth (17 percent) of the investors surveyed said they felt more positive about their finances than the previous year, with a similar number (18 percent) feeling less confident than a year ago.
Robert Szechenyi, investment director at Rathbones commented: “Brexit has dominated the political and economic agenda for the last year, and with negotiations starting to heat up, that’s unlikely to change any time soon. But in this climate of heightened uncertainty, it’s encouraging to see investors appreciate that there need not be a ‘bad’ Brexit scenario as far as their investments are concerned.
“So long as investors are vigilant and prepared to adapt and make sure their investment portfolio is diversified, they should be able to make positive investment choices which mitigate both the risks of Brexit and inflation. Speaking to an adviser will help ensure that investment choices are made with all eventualities taken into account."
He concluded: “The fact that close to a fifth of the investors we surveyed felt more positive about their financial situation than last year is encouraging and shows that, despite some adverse conditions, shrewd investment strategies have the potential to reap rewards.”
Rathbone Investment Management manages over £37.5 billion of funds for individuals, charities and trustees, and is part of Rathbone Brothers Plc, an independently owned company with a listing on the London Stock Exchange.