Work life balance drives retail investing boom

The ‘Great Resignation’ in the UK is in full effect, with analysis by Deutsche Bank finding that more people left their jobs at the start of 2022 than at any point in the last decade, with Brits considering their options caused by the pandemic. The number of open vacancies in the UK is at its highest point ever, meanwhile, redundancies are at their lowest point since the 90s.

Recent research showed that a third of individuals who left their job plan to start their own business, while another quarter of those who quit say they plan to become a freelancer. This shows a clear shift of focus, bought on from the pandemic of individuals not wanting to be employed in a full-time role and instead taking the responsibility of their finances on themselves.

Research showed that 50% of those who left their jobs are living on savings as they look to find the most astute investment choice to provide them with enough passive income. Brits are looking to become financially stable by leaning on investments as opposed to their employment income with investors pouring £43.3bn into retail investments in 2021, representing the second largest investment year for retail funds. Digital wealth manager Nutmeg also saw a 53% increase in clients in 2021, taking their assets under management to over £3bn.

Passive income investing has become a norm for Brits, with many investors choosing to follow investment sites which provide followers with advice for what to invest in to achieve financial independence, such as wallstreetbets, a reddit thread which boasts over 11 million members and provides their members with predictions for which stocks to invest in. With investors putting more money into stock-based funds over the first five months of 2021 than the previous 12 years combined.

A major disconnect between workers and their employers is prominent at the moment, with Brits choosing to rely on their savings and investment options rather than staying in a job where they are unhappy.

Luke Davis, CEO of IW Capital discusses:

“This past year was certainly a momentous one in the world of investing. The pandemic has had an impact on the UK in ways that we could never have predicted, it has created a new class of investor, an individual who is not happy in their current position and is choosing investments to provide them with passive income in their pursuit to become financially stable .

“The Great Resignation is an inspiring thing to see, with individuals leaving their jobs and choosing to live on their savings. The investing market, particularly retail investing, has seen sharp increases of the amount of money invested due to this. Investments are now more important than ever, with more individuals relying on their investments for their main passive income.

“The EIS could also be an important trend throughout 2022. The EIS can be said to offer a win-win situation for both investors and small businesses – providing SMEs with much-needed investment to provide them with a platform to grow, whilst providing investors with tax reliefs to incentivise this investment. Small businesses and SMEs throughout the UK have benefitted enormously from the EIS in the last 25 years, fuelling growth and job creation at an impressive scale. SMEs are becoming so inventive and versatile with their companies and making sure they are at the forefront of the UK business scene. SMEs are an indispensable part of the UK economy and the outlook for the festive period is a reward for their constant hard work.”