A majority of British savers (67%) have claimed they are concerned about the current volatility in the stock market, and it is putting them off investing, new research has found.
The data from Zopa revealed that over half (55%) of UK savers said they are unlikely to consider opening a stocks and shares ISA in 2019.
However, Zopa described the struggle for savers as “being caught between a rock and a hard place” as their options are limited, having to choose between a volatile stock market or a low-interest savings product.
While stock market volatility and economic uncertainty normally drives people to seek sanctuary in cash, bonds and other savings accounts, Zopa’s survey found that people were putting the brakes on saving, with less than 1 in 3 Brits expecting to save more in 2019 than they did last year.
Savers have faced more than a decade of poor returns, with many growing tired of the poor rates offered by providers. Old favourite homes for savings, such as cash ISAs, once seen as a safe haven for cash, saw a decline in adoption, with the number of adult ISAs subscribed to declining from 11.1 million in 2016/17 to 10.8 million in 2017/18, according to HM Revenue & Customs (HMRC) figures.
Britons said that the main barriers to saving more money this year were the increased cost of living (35%), uncertainty caused by Brexit (21%), high inflation (14%), and low returns from savings (14%).
The solution to this, said Zopa, is for savers to turn their attention to the Innovative Finance ISA (IFISA).
This April marks the third anniversary of the launch of the IFISA, though awareness of the product still remains low, with 77% of British savers having never heard of it.
Zopa described the IFISA as a product that offers consumers “the chance to invest some or all of their £20,000 ISA allowance in peer-to-peer loans - with the returns protected from the taxman - the IFISA holds the promise of tax efficient, stock-market-beating returns with lower volatility”.
Zopa chief product officer Andrew Lawson commented: “2019 is going to be yet another challenging year for savers and investors. Our research shows that people continue to be disappointed by traditional financial products like the Cash ISA or investing via the stock market.
“The IFISA stands as the perfect middle ground, offering a great alternative for people who want higher returns than cash ISAs, but not the volatility of stocks and shares.
“Peer-to-peer lending can be incredibly effective way to diversify an investment portfolio. People looking to invest need to know what assets they are investing and the related risks – personal loans in particular are reasonably stable and predictable.”
NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?
The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.
Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.
The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.
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