tink investment pot
Europe Insights Open Finance Wealthtech

The Shifting Landscape of Armchair Investing: Investment Pots as Lifeline

Amid challenging economic times, a significant shift in the investment landscape has come to light, revealing the newfound role of investment pots as crucial financial ‘safety nets’ for armchair investors.

New research from open banking platform Tink reveals that ‘set and forget’ investing has become a thing of the past as retail investors more frequently dip into investment pots to bolster their income during uncertain times.

As many investors liquidate assets to manage the cost-of-living crisis, Tink’s research found that the ability to instantaneously move money in and out of investment accounts is becoming increasingly important.

Its survey of active retail investors in the UK who use DIY investment platforms identified that half of respondents said investing during the pandemic helped to supplement their income, and in more recent times, 51 per cent have cashed in some of their investments to help with the cost of living.

Furthermore, 42 per cent of retail investors who owned a home have also dipped into their investment pots to reduce mortgage borrowing due to rising interest rates. For many, investing isn’t an affordable option today.

Nearly a fifth (19 per cent) of retail investors surveyed plan to divest their investments in the next six months because they need the cash, while two-thirds (66 per cent) worry about their investments against the current economic climate.

Investment apps

“During the cost-of-living crisis, armchair investors are leaning on their investment pots as a way to support their day-to-day finances,” said Tom Pope, SVP payments and platforms at Tink. “But with many people today having less available money to invest with, investment apps are competing for a shrinking share of wallet.

“Against this backdrop, investment apps can’t afford to deliver poor user experiences or friction-filled processes. Investors want to be able to transfer money seamlessly between their bank accounts and investment accounts without needing to leave the app or website. By leveraging open banking payments, investment platforms can transform user experiences and support customers as they look to their investments to help them through this period.”

When using investment apps, three-quarters of those surveyed would like to be able to instantly transfer money from bank accounts to investment accounts, without having to leave the platform app/website, with 18 per cent considering switching platforms if this function was available elsewhere.

Retail investors are willing to invest more if investment platforms enhance user experiences. One in five retail investors would consider increasing their investments if an investment platform offered a simpler or more instantaneous onboarding process. Similarly, 18 per cent would be motivated to invest more if they could make instant payments to their investment accounts via the platform.


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