I don't understand why people can't be bothered!

Eco_Miser

missbiggles1 wrote: »

Given the large number of people whose income is so low as to make them eligible for state top ups (over 3 million at the last count) I really wouldn't be so confident about using words like "large majority" in this context.

That's about 5% of the UK population, so those not with such a low income make up about 95%. I call that a large majority.

Thrugelmir

jimjames wrote: »

I guess it's the same mentality that means so many do the lottery every week.

The best piece of advice my late father passed onto me was to save into a pension immediately I started full time work. Only £10 a month. Yet with tax relief and compounding over the years it's grown into a handy sum.

Thrugelmir

Linton wrote: »

The children and grandchildren absorbed the same attitudes which became increasingly inapproriate as general wealth increased.

Wealth or the illusion of. Funded by credit. Buy now pay later. All very well until financial disaster strikes. Majority of people under 45 have never experienced a real recession. Might be austerity led times now but finding work of some kind is not impossible.

eskbanker

bigfreddiel wrote: »

we are all different

"I'm not!"

bertpalmer

It really surprises me how few of my friends bother with investments. I think if I hadn't worked in the sector (back office admin!) I'd never have realised the potential of investing.

I guess it mainly comes down to education. I find it odd how Martin always talks about bank acc interest rates and finding the best one, but rarely talks about the benefits of investing. Same with TV adverts.

missbiggles1

Eco_Miser wrote: »

That's about 5% of the UK population, so those not with such a low income make up about 95%. I call that a large majority.

Given that you need to be between 25 and retirement age to claim WTC, (and you're only eligible if you're working) the percentages are not as extreme as you're trying to paint. Comparing the numbers with the whole of the UK population is deliberately misleading.

Outside London, 20% of working households claim in work top ups - if you add in the numbers who are unemployed (and so, hopefully, worse off) and disabled people not in employment, you get a far more honest picture of those without much in the way of excess income.

jimjames

I suppose thinking about it logically when 70% of the population have less than £2000 in savings then it's unlikely that they'd look to invest when they don't even have an emergency fund. What's more surprising is the number of people relying on large sums of cash savings for income that are not using investments for at least part of their money. When there is no sign of any rise in interest rates for the near future and I wouldn't expect any significant rise for the next 5 years at least then the differential for income loss between savings and investments is massive.

With the magic of compounding it doesn't take many years for a 3% difference between savings and investment income to start to impact and after 10 years you'd have nearly 40% more with investments at 4% than savings at 1%.


1% interest on savings, with income reinvested, £11046 after 10 years
4% dividends on investment with income reinvested, £14802 after 10 years.


We've already had 6.5 years of these ultra low interest rates, if it carries on for at least another 5 years which seems entirely possible then the situation is even worse. By 15 years the differential between the two is savings £11609, investment £18,009. Obviously the capital value of the investment can rise and fall but the income is more stable - many trusts have paid increasing income for 40+ years.

Malthusian

bertpalmer wrote:

I find it odd how Martin always talks about bank acc interest rates and finding the best one, but rarely talks about the benefits of investing. Same with TV adverts.

Martin Lewis™ tells someone to invest in a fancy current account that pays 1% more than the competition and some cashback, after a year they have a few extra pennies, hooray for Martin.

Martin Lewis™ tells someone to consider investment in the stockmarket, after a year the market has fallen 10%, boo for Martin.

Five years later the current account has long slashed its interest to nothing (while keeping the monthly fee), and the stockmarket is up 26%, but no-one remembers what Martin Lewis™ said five years ago, and he's sold his shares in Moneysupermarket anyway, so it hardly matters.

The vast majority of people who read a Moneysupermarket article won't still be reading Moneysupermarket articles in five years' time - they'll be reading whatever Google throws up then. And even if they are, Lewis won't be writing them. So it's not in Lewis' interests to promote something that could go down in the short term even if it makes people better off in the long term. By contrast, financial advisers know (or at least assume) their clients will still be with them in five years' time and they advise them accordingly.

moneyfoolish wrote:

The second (and probably most important) is that my job was based on logic (I was an IT programmer for over 40 years) and with savings accounts I can put my money into what I KNOW are the best performing accounts whereas with funds there are far too many choices and there is no history or certainty.

If that's your worry then invest in tracker funds. You know it won't be the best fund but you also know it won't be the worst. And if it is tracking an established, diversified index and physically holds the shares then you have the closest thing there is to certainty that it will beat cash over the long term.

latecomer

I'm sure there are a lot of reasons - ignorance, fear, lack of trust, laziness to name a few

I've always worked in high tech companies and shares are very much part of the package (although not as much as back in 2000 when share options ruled everything). I've seen the down side of shares and specifically the risk of holding single company shares. My current company shares are up ~200% in 3 years. I've been here reading about investing for at least 5-6+ years. My OH is not as comfortable with shares/investing as I am at least in theory but I've still not invested in a S&S ISA despite having a moderately adverturous pension portfolio.

I do fear the value of investments going down despite knowing all the long term research saying that shares nearly always beat cash. I have been on the verge of moving my cash ISA to shares for several years but haven't done so... yet. I fear not getting the best deal in anything I do - I research and negotiate my next phone contract for weeks, same for broadband contracts etc. I know I need to make this small step but cant seem to do it.

lippy1923

Lack of knowledge, CBA attitudes, Fear, Lack of ability to spend within means.... the list goes on as others have suggested.

It also depends on someone's viewpoint on the word "investing"

Personally I invest in my pension
I invest in my education (actually that's kind of a lie, I got my work to pay for my qualification/study but if they refused I would have paid myself)
I invest in my health and fitness - Boot camps, gym, running shoes etc, I even consider my nutribullet blender to be a health investment
I invest in holidays, iphones, treats I want when I want them
I OP my mortgage as the rate is higher than most savings rates
I invest in my son - buy him anything I feel will benefit him (spoil him rotten really)

I don't currently have any S&S investments due to lack of understanding and lack of time to learn.... Aim to rectify this once my exams are over with.

Maybe some people just invest in other things I guess.