Wealthy investors fail to make their money work hard

Wealthy investors across Europe are saving more than a third of their household income every month – three times as much as they spend on repaying debts.

Though many could make more money by investing rather than saving while interest rates are so low.

When asked about monthly spending patterns, high net worth individuals said they spend 53% of their income, save 35% and allocate 11% to servicing debt.

Much of the cash goes to retirement saving as a pension (41%) and emergency savings (38%), while lifestyle spending like hobbies (20%), childcare fees (6%) and paying for the care of elderly relatives also feature (7%).

Other money is allocated to hopes of early retirement (19%) and changing jobs (6%).

The Schroders European Wealth Index also revealed wealthy British investors were more likely to have a financial plan (95%), followed by the French (87%) and Israelis (85%).

The British (57%) and Swedes (49%) were most likely to have a pension and a cash fund for emergencies (Sweden 54%, Britain 50%).

Funding children through school and university is a priority for investors in Israel (36%) and Portugal (25%) , but those in France (8%) and Sweden (8%) were the least likely to bother.

Peter Beckett, head of international marketing at Schroders, said: “People are having to

react to on going market uncertainty but our research indicates that affluent investors across Europe

are saving and investing a significant proportion of their resources, suggesting many are able to juggle day to day costs with the need to make plans to meet long-term goals.

“However, one cause for concern is that in most of the countries surveyed, investors are tending to save more than they invest. Given low interest rates in many countries it means that savings rates are often not even keeping up with inflation and many investors could make their money work harder by considering a range of income-generating investment options.”