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33% investors in Finland reduce investment in 2022: OP

Published : 22 Mar 2023, 01:29

  DF Report
DF File Photo.

As many as 33 per cent of investors in Finland have reduced the amount of funds used for investments during the past year, according to a survey conducted by Financial Groups OP Pohjola (OP).

In addition, one in seven investors has had to sell their investments to afford increasing daily expenses, said OP in a press release on Tuesday, quoting the survey.

As a result of rising interest rates, many people are wondering whether additional loan repayments are a good idea.

The survey indicates that 35 per cent of males and 30 per cent of females have said they have reduced the amount of funds used for investing in the past year.

About 69 percent respondents considered increased daily expenses to be the main reason for reducing the amount of funds.

The second most common reason was a worse economic outlook according to 28 per cent of respondents.

In addition, about a quarter of respondents stated that they had reduced investment amounts because their investments were loss-making.

Moreover, 14 per cent of people in Finland owning securities stated that they had to sell their investments during the past year to afford daily expenses. The majority of investments were sold by people aged 25 to 34.

“Inflation and a rise in interest rates have a significant effect on peoples’ lives, so the results are not surprising. Situations vary greatly between households depending on the amount of savings, for example. The good news is that the amount of real income will slowly increase over the next year, as income levels are expected to increase faster than inflation,” said Kai Kalajainen, Director, Wealth Management Customers of OP.

In the survey, young people stated that loss-making investments and falling exchange rates had caused them to reduce their investment amounts.

The urge to invest has remained, but many consider using their investments and savings to pay for additional loan repayments

As a result of rising interest rates, many home loan borrowers are considering making additional loan repayments with their investment funds.

The 12-month Euribor, the most common reference rate for home loans, is now at 3.395 per cent (20 March).

With an average home loan of about EUR 150,000 and with the current rise in interest rates, monthly expenses are hundreds of euros higher than in the previous year.

According to OP’s customer data, people in Finland continue to actively invest, but with smaller funds than in 2020 and 2021.

For example, monthly investing into funds has remained lively. In January, OP’s customers had 520,000 monthly investment fund agreements, which was more than ever before.

Held in January 2023, the OP Financial Group survey was answered by a nationally representative online panel of 18–79-year-old Finns.

A total of 2,628 participated in the survey conducted by Taloustutkimus for OP Financial Group.

The margin of error is plus or minus 2.0 percentage points.