This represents a massive opportunity for advisers, said Mike Parsons, head of UK sales at JP Morgan: “Income is the topic of the generation, rates are low and the continual stretch for yield we have seen in the last few years persists. And, for investors it is not getting any easier.”
Especially, as the survey found that of the nearly 1,000 respondents from the UK, 62% claimed to be seeking some income yet just 44% of UK investors were able to correctly explain the meaning of the term ‘income investing.’
Commenting on the results, Jasper Berens, head of UK funds at J.P. Morgan said: “It’s surprising that familiarity with income investing amongst UK investors is relatively low. Generating income whilst balancing risk is only going to become more important as the pensions freedoms come into force this year.”
78% of UK participants said they own individual stocks and bonds, slightly higher than the average, but only 30% reported owning mutual funds, significantly lower than the EU average of 60%. Despite this, only 8% reported being comfortable with market volatility, 45% said they were comfortable with a little risk.
According to JP Morgan, The survey revealed that 39% of UK investors aim to reinvest income generated from investments, while 28% said they would spend it; 17% said they would save that income in cash.
46% said, the income generated was used to maintain or supplement their current lifestyle, while 35% said it would be saved for the future.
The firm conducted the survey with market research company, GfK and surveyed 4805 people across Europe, including almost 1000 people in the UK. Each participant has at least €20,000 in investible assets, but the most affluent were found in the UK and Switzerland, where the average was €109 ,000. In the UK the average age of the participants was also higher than the overall average for the region at 56. This also explains the slightly higher number of people that were already drawing on this income for retirement.
