Pandemic leaves 1.3 million investors playing catch-up

New research has shed light on how far off course the nation’s finances have been blown by the pandemic.

One in six investors (16.6%) believes their plans to meets their financial goals in life have been knocked off course by the pandemic, new research has found.

The respondents to the survey by Opinium for investment house Capital Group said they believe it will take them “at least five years” to get back on track towards their target.

If extrapolated across all UK investors it means that some 1.3 million people may have been left playing catch-up with their personal finances by the lockdowns and economic fallout caused by Covid.

The research was designed to gauge the pandemic’s impact on UK investors. It was nationally representative and took in the views of 1,003 retail investors aged over 45 years with £50,000 or more in investments.

The researchers found that a key question faced by investors in the wake of the pandemic is: “can I still expect the same income and lifestyle in retirement?”

It is very early in the process of understanding the long-term impact of the pandemic. Personal finance is just one of several key areas that it is crucial for governments and individuals to understand.

• Are you saving enough for retirement? Our pension calculator can help you find out.
• Be up to £94k better off with an ii SIPP
• Pensions jargon buster

When it comes to investing, it seems highly likely there will have been a profound impact on many people. Those who lost jobs or were furloughed for example, will in many cases have had to cut back on buying shares, or dip into their cash savings in order to buy the things they need.

With the effects of compounding taken into account, every pound that was not invested due to the pandemic will have a growing impact on peoples’ investment pots over time.

“The last 18 months have thrown many curveballs in the form of ill health, lost income, job loss, and bereavement or caring responsibilities,” said Becky O'Connor, head of pensions and savings at interactive investor. 

“For some, income hits have been offset by more saved through lower living costs, but that’s not the case for all and self-employed company directors, as well as those working in hospitality and leisure, have had a particularly hard time.

“Unfortunately, the pain isn’t over just because the economy has begun to revive. Debt repayments still need to be met, as does any unpaid tax and any other payments that were delayed: surviving short-term financial shocks can translate into years of higher monthly outgoings,” O'Connor continued.

“Not all investors experienced high growth from their portfolios over the pandemic – some suffered losses that will affect their income in retirement. For those dependent on returns from their pension, this is a significant blow.”

Commenting on the research’s findings, Chris Miles, head of financial intermediaries UK at Capital Group, said: “UK investors will have come through moments of severe disruption and turmoil in the past, but it’s clear the Covid-19 pandemic has taken its toll on many investors’ financial plans, with recovery for some over five years away.”

• Six things you must do before buying any share
• Check out our award-winning stocks and shares ISA