Pandemic results in almost ten per cent of adults investing for the first time
Nine per cent of adults have started investing for the first time since the start of the coronavirus pandemic, a survey has found.
Eighteen to 24-year-olds are particularly likely to have turned to investments for the first time, with 16 per cent having done so, according to Halifax Share Dealing.
Low interest rates in the cash savings market may be prompting more people to consider investing.
But while the rewards from investing may be potentially higher, the risks may also be increased, and people could end up losing money.
The Financial Conduct Authority (FCA) recently warned that a newer, younger group of investors, some of whom are getting involved in schemes such as cryptocurrencies and foreign exchange, could be taking on big risks.
The newer group are more likely to use social media and channels for tips and news, the FCA said.
Investment and pensions scammers are also preying on people looking for higher returns in the tough economic conditions - and people could end up losing their life savings to criminals.
The Halifax Share Dealing survey found that having more spare time was the main factor for people becoming interested in investments.
Nearly a quarter (24 per cent) said they had more time to research options and about 16 per cent had more time to arrange investments.
Having more disposable cash, perhaps from spending less on commuting and socialising over the past year, was also a factor for 17 per cent.
Out of those who had more extra money, the most popular investment options were bonds (16 per cent) followed by stocks and shares (14 per cent) and trusts (10 per cent).
Existing investors had also been influenced by the paninvest demic. Nearly one in five had increased their investments since the start of the pandemic, and the same proportion had diversified their investment products during this time.
Despite this boost in engagement with the stock market, one of the biggest barriers for those who had not started investing was being scared of losing money, which was putting off 39 per cent of people.
This is followed by not knowing enough about the stocks and shares market (34 per cent). Nearly half (49 per cent) of women said they were too scared of losing money to versus 30 per cent of men. Women were also more likely to say they did not know enough about the stocks and shares market to invest, at 42 per cent of those who had not invested versus 25 per cent.
Those who are interested in investing may want to consider getting independent financial advice from someone who is suitably qualified.
Manuel Pardavila-gonzalez, managing director, Halifax Share Dealing, said: "This spike in trades suggests that people with more spare time and cash have used it to start dip ping their toe into the world of investment or increase their portfolio. We saw record numbers of trades on our platform throughout lockdown.”
More than 2,000 people were surveyed across the UK in February.