Savers fear illiquid investments

Almost three-quarters of savers (70%) fear investing in illiquid UK assets, including infrastructure and start-ups, according to a PensionBee study, due to potentially higher risks and costs.

The survey found that there was a client preference for only certain investments in UK illiquid assets among 39% of savers, while 36% were in favor of not investing in UK illiquid assets at all.

More than three-quarters (76%) of consumers also said they would be reluctant to experience delays because their illiquid assets would be converted into cash, which would prevent them from transferring or accessing their pension savings quickly, 32% of them stating that they would be “very frustrated”.

The findings follow the government’s recent challenge to UK institutional investors, including pension schemes, to invest in longer-term illiquid investments in order to trigger an ‘investment big bang’.

PensionBee CEO Romi Savova commented: “We don’t think the UK government should play a role in deciding the allocation of pension assets. Our latest research indicates that a significant portion of the general public also shares our concerns.

“The routine investment selection process should be followed in all cases, including when deciding to add illiquid assets to an investment portfolio.

“Illiquids, like all asset classes, will change over time, and we expect our asset managers to monitor competition and cost outcomes, and maintain a risk-appropriate selection process. “