How the over 60s invest

Graham Spooner, investment research analyst at The Share Centre, reveals the investing activity through The Share Centre for those over pension age.

How the over 60s invest

Research conducted by The Share Centre earlier this year suggested that one in four wealthy investors (24%) are shunning private pensions in favour of stocks and shares ISAs.

The research of more than 1,000 investors with more than £10,000 in investments investigated why people are investing in stocks and shares ISA as a savings vehicle. The findings were that a quarter are simply replacing their private pension with a stocks and shares ISA, whilst 27% are using ISAs to build up a holiday pot and one in five (21%) planning on using investments to fund school and university fees.

Stocks and shares ISAs are becoming more relied upon because they offer greater flexibility of being able to access the money you invest if needed. This appetite for increased flexibility and access to long term savings is stronger than ever, especially since George Osborne announced changes to the way people could access their retirement savings in May 2014.

It goes without saying that the 2016/17 tax year hasn’t exactly been a quiet one! To gauge how pensioners have dealt with the volatility, we analysed the trades made in ISAs to establish the most popular companies and sectors for those over and including the age of 60.

Sector analysis

Sector analysis is always interesting as it gives us a real insight into what’s popular on a larger scale amongst The Share Centre customers. Unsurprisingly the mining and oil & gas producers featured as the two most traded sectors for pensioners over the period. This could be down to companies within the sectors being on a journey of recovery or having more global exposure.

Taking Brexit into account, it is also not a surprise to see Banks as well as Construction & Materials feature as the next most popular, given that companies within these sectors were so heavily affected immediately after the vote. Propping up the top five most popular sectors was support services. In recent years there has been a steady flow of merger and acquisition activity involving companies within the sector so pensioners could be looking for new opportunities.

On an individual company basis, the most traded stock for those over 60 was a stalwart choice for The Share Centre customers – Lloyds Banking. Given that its business is predominately UK and geared to the housing market, it’s no surprise that it fell so much post Brexit. However, with the share price back to levels last seen in 2013 pensioners could be taking their chances with this one.

Taylor Wimpey is the second most traded stock for pensioners within ISAs this tax year; again it’s not new news that the housebuilder didn’t fare so well post Brexit. Interestingly, it has been bought more times than it has been sold for this age group over the period so it looks like pensioners are more confident in the UK housing market than others perhaps.

The next most traded is the resilient and very defensive GlaxoSmithKline. The nature of the sector and the stock make it a popular choice amongst all of our investors. This is followed by Royal Dutch Shell and Aviva, both renowned names within their respective industries.

 

 

Please remember, no news or research item is a recommendation or advice to buy. Every Investor is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest.

 

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