Investors pour lockdown savings into stock market

SaverS are piling billions into the stock market and other investments as they try to protect savings built up during the Covid lockdowns from rising inflation.

Investment platform aJ Bell and wealth manager St James’s Place (SJP) both said they have taken in huge sums of money over the past year.

SJP said funds under management hit £148bn at the end of September – up 25pc on the same period last year.

aJ Bell, meanwhile, saw the amount invested through its platforms shoot up 31pc over the year to £65.3bn. Those who kept their jobs through lockdowns saved ‘unprecedented’ amounts, according to one analyst.

Jeremy Fawcett, head of research consultancy Platforum, said the higher savings, people going out less and working from home created the perfect conditions for new investors to take their first steps.

SJP said people with cash reserves were investing to avoid inflation ‘eroding its value’. as inflation pushes prices up, the effective value of cash goes down. Chief executive andrew Croft said despite economic ‘uncertainty’ he expected savers would invest 25pc more cash with the firm by the end of 2021 than a year earlier.

aJ Bell said underpinning its own growth was an ongoing shift to online investment platforms. It also said rising inflation, low interest rates and savers with cash on hand because of lockdowns drove the growth.

The investment platform’s customer base shot up by 31pc to 367,965 in the year to September 30. Chief executive andy Bell hailed the ‘strong growth’ and said it saw very strong demand from retail investors throughout the pandemic.

he said trading activity had ‘returned to more normal levels compared to the peaks seen earlier in the year’ as Covid restrictions have eased.

Both aJ Bell and SJP noted investors’ increasing focus on long-term financial planning.