Turbulence on financial markets sees billions in savings disappear

The chaos on financial markets has wiped billions off savings looked after by some of the UK’s biggest investment firms. 

Turbulence caused by rising interest rates and economic woes pushed assets held by Schroders down by £21billion between June and September. 

The blue-blooded wealth manager saw heavy losses in the part of its business that houses liability-driven investment (LDI) funds, which are used by pension funds to make sure they can afford future pay-outs to members. 

LDIs hold large amounts of gilts, or government debt, and have been hammered in recent weeks after the tax cuts announced in Kwasi Kwarteng’s mini-Budget sent markets into a tailspin. 

Schroders’ Solutions business alone saw assets tumble by £20.2billion. AJ Bell saw savings invested through its platform slide by 2 per cent to £64.1billion in the year to September. Wealth manager St James’s Place also revealed that its funds under management had slipped from £148billion to £143billion over the past year – though this sum was up slightly from three months ago. 

Unlike the other firms, fund manager Jupiter was still seeing customers pull more money out than they put in. But these so-called net outflows slowed in the third quarter to £600m, from £2billion in the previous three months. 

Even so, the outflows added to the fall caused by a sliding market, and assets under management ended September at £47.4billion – down from £48.8billion three months earlier, or £60.7billion a year ago.