People approaching retirement have far higher levels of anxiety about the financial consequences of the Covid-19 pandemic than younger investors, according to new research.
Aegon has launched a new tracker survey to understand how savers and investors are behaving as a result of the coronavirus and ensuring market volatility.
This survey — conducted at the end of the March — demonstrated that the impact is acute, with many people concerned not only about their health but their finances too. The highest levels of anxiety were found in the 55-64 age group.
There was however less concern among younger age groups, who are just starting to build pension savings. Only a third of those int he 18-34 age range had checked the performance of their investments in the last four weeks, compared to more than one in two (53 per cent) of those in the 55 to 64 year old bracket.
Aegon says this suggests younger investors with longer investment horizons are less anxious, which may at least partly be because they have less saved.
Aegon pensions director Steven Cameron says: “We’re going through extremely concerning times with the coronavirus crisis affecting every walk of live from health to wealth.
“Our research shows the very different reactions people have depending on what stage of life they are at. In times of high market volatility younger investors are generally more prepared to shut out the noise, and take comfort that historically the best strategy appears to be to stay on the same course they set out on.”
In terms of reacting to highly volatile market conditions, some 18 to 34-year olds in particular have taken this as an opportunity to invest with 28 per cent making one off investments, compared to just one in ten of 55 to 64 year olds.
Those in the older category have also taken considerably more time to inform themselves of market conditions. In terms of paying attention to what is happening in the stock market there was a marked difference with 72 per cent of those in the older group focusing on market movements, compared to 44 per cent of younger savers.
Cameron adds: “In these exceptional times there’s a risk that people, particularly those without an adviser, may panic and react to market movements by rushing into financial decisions that could have long term adverse consequences.
“After the significant falls in stock markets, it can often be in individuals’ interest to avoid cashing in stock market investments and look to draw money from other sources of savings. It can also make sense if possible to take less income or only what you really need right now. It’s always good to seek advice, and especially so in the current climate before taking any big decisions.”
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