Of Special Interest
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- Juniper forecasts mobile money transactions will exceed 200 billion by 2024
- Europe’s big bank problem: too much capital is trapped in the US, says Scope
- Banks can save the world from climate change, says former UN climate chief
- Research by NatWest reveals gender divide over attitudes to saving
- Later-Life lending market set to almost double in the next 10 years, finds report
- Barclays/Cebr report challenges nation to think differently about wealth
- Fifth of UK investors looking to debt investment, new research reveals
- Regtech will play a more important role in PSD2, says Mitek
- Banks turn to Fintech partnerships to improve customer experience, finds Fraedom
- New industry code to tackle fraud must deliver, says Which?
- New TTF report highlights loss of trust in financial services
- Arxan highlights financial app vulnerability epidemic
- SAS asks whether banks really need to choose between operations and innovation
- Which? raises alarm as almost 1,700 free ATMs become fee-charging
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
18th June 2019
Fifth of UK investors looking to debt investment, new research reveals
FJP Investment has commissioned an independent survey among more than 950 UK investors, exploring their sentiment towards debt investment. It found that one in five UK investors is considering debt investment amidst low interest rates and Brexit uncertainty.
The survey found that while 9 per cent of them currently hold some form of debt investment, 20 per cent are considering this investment type within the 2019/20 financial year – this figure rises to 34 per cent among investors aged under 35.
Of the investors, 36 per cent said the low 0.75 per cent base interest rate makes debt investment an attractive option for the money they currently have in savings. Furthermore, 44 per cent said debt investments appeal to them as they can provide short-and medium-term returns at a time when they are reluctant to make long-term investments due to the political and economic uncertainty caused by Brexit.
However, the research revealed that investors’ main concern regarding debt investments is the ability of the borrower to repay the loan: 67 per cent of respondents said they are wary about this type of investment because of fears the recipient of the capital would default on their repayments.
Conversely, the survey found that in 30 per cent of investors believe the great strength of debt investments lies in the fact they deliver regular, pre-defined returns. Meanwhile, 35 per cent said they think debt investments are simpler than other asset classes because there are no complicated exit strategies to contend with.
Elsewhere the study illustrated the positive impact debt investment can have in providing much-needed capital to individuals or organisations that are unable to access it from institutional lenders: 40 per cent of UK investors said they consider debt investment a good means of supporting others to achieve specific financial goals.
Jamie Johnson, CEO and Founder of FJP Investment, commented on the results: “Debt investment has become more popular over recent years, yet many investors remain wary of it. Such concerns are perpetuated by investment providers not conducting thorough due diligence of potential borrowers to ensure the risk of defaulting is as low as possible.
“Debt investment presents many benefits, particularly amidst low interest rates and Brexit uncertainty, as our research shows. It can provide regular returns over several years, which will attract those keen to make their money work harder without committing to long-term investments.”
Key data points:
• 36 per cent consider debt investment as an attractive option for achieving higher returns for the money they have in savings, with interest rates lingering at just 0.75 per cent
• 44 per cent are focused on short-term investments due to the political and economic uncertainty caused by Brexit – this rises to 68 per cent among those aged under 35
• 20 per cent of UK investors are considering making a debt investment in the 2019/20 financial year – this figure rises to 34 per cent among 18-34 year olds
• 67 per cent of respondents said they remain wary of debt investment amidst fears that borrowers will not be able to make their repayments
• 30 per cent see the main strength of debt investment as its ability to deliver regular, fixed returns, while 35 per cent see it as a simpler form of investment without complications around exit strategies
• 40 per cent of investors see debt investment as a positive way of supporting UK businesses in need of capital but who are unable to turn to institutional lenders