Investors confused by Reeves’ Budget

Monday, 18 November 2024 09:31

Rachel Reeves, Chancellor of the Exchequer

A quarter (26%) of investors didn’t understand the changes made by the Chancellor in the Autumn Statement, according to research published today.

Wealth manager Charles Stanley asked self-directed investors - DIY investors - what reaction they had to Rachel Reeves’ Budget.

Asked whether they believe the announcements in the Budget will help UK investors in the long-run, respondents were divided with just less than two fifths (38%) saying they believed it will, while just more than two-fifths (41%) saying they did not.

Slightly more investors said they would increase their asset exposure to the UK as a result of the Budget with a quarter (25%) saying they are decreasing while 29% said they are increasing their asset exposure.

The research also revealed that the Budget has already changed investor behaviour. Almost two-fifths (38%) of DIY investors said that they have already made specific stock picks that they believe will benefit from the Budget.

A third (32%) said they have accelerated plans to move wealth abroad with a further third (33%) saying that the Budget has made them more interested in investing in the AIM market.

Regardless of its impact, the UK’s DIY investor community had a close eye on the Budget. Almost two thirds (63%) said they monitored it closely. However, 26% said they didn’t understand the changes made, and a further 13% weren’t sure.

	True	False
I closely monitored the Budget	63%	25%
I understand the changes the Chancellor made in the Budget	61%	26%
As a result of the Budget I’m increasing my asset exposure to the UK	29%	52%
As a result of the Budget I’m decreasing my asset exposure to the UK	25%	56%
The Budget has made me more sceptical of the AIM market	40%	38%
The Budget has made me more interested in investing in the AIM market	33%	46%
I’ve accelerated my plans to move my wealth abroad as a result of the Budget	32%	50%
I’ve hired / am hiring a financial adviser to help me manage my money as a result of the Budget	26%	57%
I regret financial decisions that I made pre-Budget based on speculation	22%	61%
I have made specific stock picks that I believe will benefit from the Budget (e.g. infrastructure, housebuilding)	38%	44%
I believe the announcements in the Budget will help UK investors in the long-run	38%	41%

Rob Morgan, chief investment analyst at Charles Stanley Direct, said: “DIY investors make up an important - and growing - cohort of the UK’s investment community, and gauging their reaction to the Autumn Statement gives valuable insight into its reception by those who have a direct stake in the country’s economic success.

“Our research paints a picture of doubt: while many investors’ confidence in the country remains intact, a larger proportion are less ebullient, and this could have a knock on effect on the value of UK equities.”

He said the longer-term effects of the Budget on the economy will become clearer with time.

• The research was carried out for Charles Stanley by Censuswide, among a sample of 1,000 DIY Investors in the UK (’Self-Directed’), defined as; investors who actively choose their own investments, making their own asset allocation decisions, aged 18+. Survey conducted between 8 and 12 November. Generational divides were: Gen Z (18-26), Millennial/ Gen Y (27-42), Gen X (43-58), Baby Boomers (59-77), Silent Generation (78+). Responses were not high enough in the Silent Gen to be statistically significant.