Confidence returning to investors?

While the credit crunch has left plenty of people wondering about how they are going to cope with their debts, there are also those who left trying to decide on the best investments.

As the weaknesses of financial systems around the world have been exposed, those who may have thought their money was safe no longer have that certainty. Indeed, the Investment Management Association (IMA) has noted that funds have been subject to “stress testing” in recent months, although it added that they appear to have withstood what has been thrown at them.

The IMA has now published its report into confidence among investors in the UK, which indicated that a degree of optimism appears to be returning. It works on a scale of zero to 200, with 100 representing neutrality. Six months ago the index stood at 71, but this rose to 106 in May.


However, a similar measure of intentions indicated that people are still not sure about what represents secure investments, as this index was at 99 – this in itself an increase of ten points.

Chief executive of the IMA Richard Saunders remarked: “These findings suggest that investors are feeling more optimistic about the investment market than they did six months ago, although they are still cautious about re-entering it.”

Meanwhile, one form of investment that has come into the spotlight lately has been pensions. Concerns are increasingly being raised about Britons’ ability to fund their retirement and people are being urged to start planning as early as possible.

Aviva is the latest company to highlight the importance of forward planning, warning that the children of today could become the ‘forever generation’. It explained that the average age of retirement is creeping up and that the state pension age could rise to 68 for men and women by 2046.

The firm also suggested that the average first-time buyer could be 41 within the next 30 years, meaning many people could still be paying off their mortgage when they are 80.

Darren Dicks, head of annuity provisions for UK Life, commented: “Without suitable pension provision and a means to pay off their mortgage before retirement, people could find themselves having to work for much longer than they do now.”

But he added: “Even though people are working longer, they are also living longer in retirement. This underlines the importance of planning ahead and preparing for a long life.”

So if a long and comfortable retirement is to be had, the key could well be forward thinking and identifying good investments now.