How are armchair investors adapting to the cost-of-living crisis?


A study by Tink has unveiled significant changes in the behaviour of retail investors in the UK, especially those using DIY investment platforms.

The research highlights a shift from the traditional long-term investment strategy to a more immediate need for cash to cope with the rising cost of living.

According to the survey, during the pandemic, half of the respondents found that investing supplemented their income. Recently, over 51% have liquidated some of their investments to manage living expenses. Additionally, 42% of homeowners have accessed their investment funds to lessen mortgage debts as interest rates climb.

The current economic scenario has led nearly 19% of retail investors to plan on divesting in the next six months due to urgent cash requirements. Moreover, 66% express concerns about their investments in light of the economic climate.

The study also reveals a growing reliance on DIY investment platforms for daily financial management. A significant 61% view their investments as integral to their daily financial dealings, while 70% consider them crucial for securing their future financially.

However, concerns about the efficiency of DIY investing platforms are prevalent. About 66% worry about losing money due to delayed account top-ups, and 70% are concerned about being locked out of their investments.

The demand for improved user experience in investment apps is evident. A considerable 74% of those surveyed desire the ability to transfer money instantly between bank and investment accounts without leaving the platform. Moreover, 18% would consider switching platforms for this feature.

Retail investors are even willing to invest more for better user experiences. About 20% would increase their investments with easier onboarding processes, and a similar proportion would invest more if platforms facilitated instant payments to investment accounts.

Tom Pope, SVP Payments & Platforms at Tink, commented on the findings. He noted, “During the cost-of-living crisis, armchair investors are relying on their investment pots for daily financial support. However, with less disposable income, investment apps are competing for a smaller share of wallet. Investment platforms need to offer seamless money transfers and user-friendly experiences to meet investor demands and help them navigate this challenging period.”

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