Historically low interest rates on cash savings accounts are sparking changes in attitudes towards investing, according to a study from NFU Mutual.

Almost half of those surveyed (49%) for a study by the mutual insurer have rethought their investment options in the past year, while three-quarters of this group (74%) said this is down to low interest rates.

The Bank of England announced yesterday that it is keeping the base rate at 0.1%.

The findings, based on a survey among 569 customers of NFU Mutual, also revealed that despite the change in attitudes to investing, many savers are continue to put extra disposable income into cash accounts (41%).

However, the research found that some are moving their money into stocks and shares to try and counter the negative effects of inflation, while others are opting to pay more towards their mortgage.

Low interest rates were the main reason behind a change in attitude to investing, but uncertainty over the coronavirus pandemic and post-Brexit trade deals between UK and the EU were the next two biggest concerns.

This combination of factors has led to more people considering financial advice than they were three months ago – although NFU Mutual revealed that fewer than one in five have received advice in the past three months.

Out of the survey’s respondents, 73% of people were confident in their future finances, even though some expect to have less disposable income in 2021. Furthermore, 17% of people are planning to invest more this year, compared to 12% who plan to invest less.

NFU Mutual investment specialist, Chris Hood, commented: “This survey shows low interest rates on cash is having an impact on attitudes to investing.

“Some people are searching for better returns on the stock market but it’s still true that a significant number of people are using their disposable income to top up cash accounts.
“Investing in shares can appear daunting but speaking to a financial adviser is often the first step to investing wisely.

“If interest rates on cash accounts remain low, it wouldn’t be surprising to see the percentage of ISAs invested in stocks-and-shares starting to increase.”

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