Most savers are unwilling to take the investment risks necessary to meet their savings goals, new research has found, and better designed products which align savings goals with risk appetites are needed.

A first of its kind study by the Pensions Institute at Cass Business School has found more than 50 per cent of savers would prefer to miss savings goals than take investment risk, and only 10 per cent would be prepared to increase risk for potentially greater reward.

Tackling this “reckless conservatism” will require better communications that explain the link between taking risk and meeting investment goals, and the need to save adequate amounts for retirement.

Better-designed investment products were also considered to be part of the solution. Products the industry has recently devised such as diversified growth funds, target date strategies, and income targeting funds might also help if the products deliver on their claims.

“The findings from our survey have important implications for savers,” report author and Pensions Institute director professor David Blake said.

“We find that savers do not tend to think about risk in an integrated way, especially when it comes to long-term risk. It is important that savers recognise that they might have behavioural barriers which means they might fail to achieve their savings goals.”

The survey, sponsored by Santander Asset Management and Moody’s Analytics, questioned 4,154 UK adults late last year.

It revealed 46 per cent of respondents consider what they are saving for in terms of specific goals. ‘Rainy day’ savings were prioritised over medium- and long-term savings by 45 per cent of respondents. Just 29 per cent of respondents prioritised long-term savings, with such respondents concentrated in the 35 to 55 age group.

The report said this suggests savers are generally more concerned about what might happen rather than what they know will happen and can plan for.

The report recommended the investment industry and advisers think about investment and savings risk in a holistic way, as taking controlled investment risk was considered the only way to meet long-term savings goals other than saving a lot more in low-risk investments.

It urged attention be paid to savings goals with a focus on what savers know will happen and can plan for over the longer term.

“The lessons for investment managers and advisers are clear,” Santander Asset Management commercial director Rob Askham said. “We need to help savers understand risk, and the consequences of not taking any risk with their savings. We need to provide cost-effective investment products that help them become confident enough to put their money to work and help meet their long-term financial goals.”

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