Almost four in ten investors believe recession poses the biggest threat to their finances, research suggests.
A study by the Association of Investment Companies (AIC) found 37% of those questioned fear a recession with 26% fearing a stock market crash.
The AIC says the results reflect the impact the credit crunch is having on the investment community, as recession did not figure among investors’ worries in the same survey last year.
Annabel Brodie-Smith, communications director at AIC, says: “The credit crunch and recent market volatility have created a trying time for investors and it has led to a fall in investor confidence.
“The biggest financial fear for all investors is a recession and the UK’s love affair with property is coming to an end. It’s not surprising active investors are backing resources at a time when oil prices are at record levels.”
The AIC report also suggests around 70% of investors are likely to give ISAs a miss this year.
It says the general public could well be missing out on valuable tax relief by not using their ISA allowance, as three quarters (74%) of active investors are planning to use their ISA allowance this year compared with less than one third (30%) of the general public.
Brodie-Smith says: “It’s hard to predict it’s going to be a busy ISA season with the recent doom and gloom but the research indicates that active investors do not want to miss out on using their ISA tax allowance.
“In contrast the general public are still missing out on ISA tax breaks and for them cash ISAs remain king.
“Of course, the recent market conditions are daunting but investors need to take a long-term approach and over the long-term equities usually outperform bank and building society accounts.”
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