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Should you really prioritise saving over investing?

03/03/2024

Recent research conducted via OnePoll shows that just 26% of people are putting their money into something other than a regular savings account or a cash ISA – a figure that’s fallen by 6% in the last year. 

But is saving rather than investing really the best idea?

 

What is holding potential investors back?

When asked why they opted for savings rather than investments, 36% of respondents said that they couldn’t afford to invest, while 22% stated that they were prioritising saving because of the high interest rates they were offered. 26% said that they were worried about potentially losing their money, while 19% simply didn’t feel confident that they knew how to invest. 

The reality, though, says Brian Byrnes of MoneyBox, is that investing could have kept pace with inflation in 2023, whereas cash savings didn’t. He believes that both saving and investing have their part to play in achieving both short and long-term financial goals. 

The biggest motivation behind those who did invest in 2023 was to build future wealth (50%), with 36% stating that they were investing for a more comfortable retirement. 

 

The impact of the cost-of-living crisis

The cost-of-living crisis has had an impact on savers and investors, with 34% saying that it has encouraged them to reflect on their financial resilience. 

Looking ahead to their plans for the coming year, 31% are making saving money for a rainy day a priority: perhaps as a result of financial struggles they have faced in recent months. 12% say they want to use this year to put clear financial goals in place, while a further 12% want 2024 to be the year when they begin their investing journey. 

Byrnes highlights that while setting aside money for a rainy day is a step towards financial resilience, it’s not everything. Instead, he stresses that it’s about taking a longer-term approach to our finances: both in terms of how we manage our money right now, and our financial planning going forward. 

Are you doing enough to build your financial resilience? 

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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