An estimated 13 million UK adults are holding a combined £430bn in cash deposits that could potentially be invested, according to a new Barclays’ report titled ‘Empowering Retail Savers to Engage with Investing’. The report identifies three key barriers preventing savers from transitioning to investing.
These estimates are conservative, focusing on individuals with more than six months’ income in cash savings, highlighting the scale of possibility if more people in the UK were encouraged to invest their funds.
The first barrier covered in the report is ‘choice paralysis,’ with 21% of respondents feeling they lack sufficient knowledge to make informed investment decisions. Additionally, 24% find investing too complex.
Furthermore, 74% expressed a desire for guidance on the best type of investment for them, and 63% want help comparing investment products.
Risk is also a significant concern, with 43% of respondents fearing they might “lose all their money” if they invested, and 66% considering the “risk of loss” as potentially losing most, if not all, of their savings.
However, 27% indicated that having access to online tools would improve their confidence in making investment decisions, and 19% said they would feel more confident if they had access to personalised information.
Additionally, 14% mentioned that clearer visual information on potential returns would help them understand the benefits of investing.
Barclays Private Bank and Wealth Management CEO, Sasha Wiggins, commented that a lack of clear, practical advice is holding savers back from investing, resulting in £430bn in potential investments being held as cash.
“If this UK investment gap can be narrowed, we will address two major untapped opportunities,” she said. “One for the 13 million potential investors who could be earning better returns on their cash savings over the long term, and the other for UK capital markets, which could see a boost if more savers were to invest.
“The industry needs to work with government and regulators to break down these barriers and help more savers to invest. Key to this is regulatory change.
“A more balanced environment is needed – one that protects investors but also allows financial providers to deliver more targeted support, without crossing the boundary between guidance and advice.”
Source: McQuaid, Darius. Money Marketing. September 2024. https://www.moneymarketing.co.uk/news/430bn-of-cash-savings-not-invested-by-uk-adults/.
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