Pension and ISA saving resilient, as general investing falls23 November 2022
New data from abrdn highlights resilience of SIPP and ISA inflows between Q2-Q3 2022, as average general investment values tumble by 11%
Clients are prioritising pension and ISA saving over general investments amid the rising cost of living, according to new research from abrdn.
Between Q2 and Q3 2022, the average amount invested in a general investment wrapper on abrdn’s Elevate platform fell by 11%. This compares to a 3% increase recorded between Q1 and Q2 2022.
In contrast, the average amount invested in self-invested personal pensions (SIPPs) between Q2 and Q3 2022 saw no change (0%), while the average value of investment in stocks and share ISAs increased by 2%.
Previously, average SIPP investments increased by 1% between Q1 and Q2, while ISA investments fell by 1%.
Jonny Black, strategic director at abrdn, Adviser, said: “This data suggests the rising cost of living is forcing people to reconsider what they do with the money they can afford to invest. We can see while people are cutting back on general investments, they are maintaining, or even increasing, pension and ISA saving.
“This is understandable. ISA saving offers clear tax benefits – which may become even more attractive now the government has announced the Capital Gains Tax (CGT) exemption will be reduced from April. And pension savers benefit from tax relief on their pension contributions at their rate of income tax, up to their annual allowance limit – essentially ‘free money’ back from the government.
“Ultimately, investors will continue to take steps to adapt their financial habits as inflation works towards its peak, and will continue to seek advice and guidance on what they should be doing, with what may be less money, to ensure they remain aligned with their financial goals.
“Advisers will continue to play a critical role in providing this support and in helping ensure clients continue to take a long-term view – keeping the right mix and balance of investments to deliver against their overall aims.”
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Analysis of regular direct debit investments made through abrdn’s Elevate platform from the 1st January 2022 to the 31st October 2022.
Notes to Editors
At abrdn, our purpose is to enable our clients to be better investors.
abrdn plc manages and administers £542 billion of assets for clients, and has over 1 million shareholders. (Figures as at 31 December 2021)
Our business is structured around three vectors – Investments, Adviser and Personal – focused on the changing needs of our clients.
For UK wealth managers and financial advisers, we provide technology, expertise and support to make it easy for them to run their businesses – and to deliver the outcomes their clients want.
We offer content and experiences that can be personalised to suit every type of business and client, giving advisers powerful data and insight to make better decisions.
We’re the number one adviser platform business in the UK for assets under administration and gross flows (Adviser AUA: £76 billion as at 31 December 2021).
We’re also the first UK adviser platform provider to receive and retain an ‘A’ rating from AKG for the financial strength of our platforms (AKG financial strength reports 2021).
The value of investments and the income from them can go down as well as up and investors may get back less than the amount invested.