A survey of 700 DIY investors* carried out by AJ Bell reveals:
• A quarter (24%) fear a reduction in the ISA allowance, while others worry about cuts to pension tax relief and death benefits
• Almost two-thirds (60%) struggle with picking their own investments, followed by tax implications (17%) and understanding pension rules (11%)
• Greater incentives from Government, simple investment solutions and fewer changes to rules top wish-lists for 2019
Tom Selby, senior analyst at AJ Bell, comments:
“It’s probably no surprise to see most savers want the Government to give them more incentives to save, although whether this is realistic at a time when Brexit uncertainty continues to grip Westminster is another matter.
“The fact almost a third of savers are worried the Government will cut pension tax relief and 24% fear a reduction in the ISA allowance perhaps suggests expectations of hand-outs are in short supply.
“Despite this there are some simple steps both policymakers and the industry can take to help struggling savers.
“There is clearly plenty of demand for simplicity, both in the products consumers receive and the rules that govern them, and regulators and ministers should take note of the fact 29% of customers say fewer changes to the rules would encourage them to save more.
“The world of investments remains a black box of complexity for most people, perhaps unsurprising given the bewildering selection of funds available.
“For those struggling to decide what to do, low-cost, ready-made solutions could well provide a suitable solution, although careful monitoring remains essential.”
*Research conducted online with 702 AJ Bell Youinvest customers during November and December 2018. Full results below:
Are you worried about any tax changes that might affect your savings products?
|
Yes, reduction in the ISA annual allowance |
24.2% |
|
Yes, removal of pension death benefits |
15.5% |
|
Yes, removal of higher rate tax relief on pensions |
15.0% |
|
Yes, reduction in the pension annual allowance |
14.7% |
|
No |
50.3% |
What would encourage you to save more?
|
Greater incentives from Government |
53.4% |
|
Simple investment solutions to meet certain needs |
29.6% |
|
Fewer changes to the rules from Government |
28.8% |
|
A simplification of the pension rules |
16.2% |
|
Less complicated communications from providers |
9.8% |
What do you find most complicated about managing your investments?
|
Choosing investments |
60.7% |
|
Tax implications |
17.1% |
|
Understanding the pension rules |
10.8% |
|
Understanding the ISA rules |
1.6% |
