New Vanguard research finds that 7 in 10 (68%)1 UK savers (non-investors) plan to start investing in the future. The shift is particularly prominent among younger savers with 91% of Gen Z (those born between 1997 and 2012) planning to get started.
Jon Cleborne, head of Vanguard Europe said, “The UK’s relationship with investing is starting to change. Many savers, especially younger people, want to invest, but too often confidence holds them back. This feels like a moment where, with the right support, investing could once again become a normal part of everyday life.”
‘Tipping point’ has potential to unlock £200 billion for UK savers and economy.
According to Vanguard calculations, people in the UK hold c. £200 billion in excess cash savings2, defined as cash beyond 3-6 months of emergency savings – that could be invested. Unlocking these savings could provide substantial long-term benefits to both UK savers and the broader economy.
As an example of the potential benefits of investing, £100 invested in global shares in 1970 and held through the oil shocks of the 1970s, the dot-com boom, and the Global Financial Crisis would now be worth c. £35,000 – ten times the £3,400 if you had kept your savings in cash3.
The UK has been a nation of investors before and can be again
Historically, the UK has been a nation of investors. Following the Tell Sid campaign of the 1980s and the boom in public share ownership, the share of UK household assets in investments climbed from 14% in 1987 to a peak of 23% in 1999, overtaking cash. But this dropped back after the dot-com bubble and has yet to recover – see the chart below. However, Vanguard’s research suggests the pendulum is now swinging in favour of investing.
Source: Office of national statistics
Bridging the confidence gap
The main barrier to getting started is “confidence”. 58% of UK savers say they feel under-informed about investing and unsure how to take the first step.
To help close this confidence gap, Vanguard’s research indicates the need to break down three main barriers: fear of losing money or getting it wrong, confusion about where to start and what it costs, and a lack of accessible support, with full financial advice currently reaching just 9% of people.
Encouragingly, once people do make the first step, they tend to say investing isn’t as hard as they thought and their confidence grows:
- 79% of investors report increased confidence once they began investing.
- 71% of investors say that investing wasn’t as hard as they thought it was.
Jon Cleborne, head of Vanguard Europe said, “The most important step is simply getting started. People shouldn’t have to become experts on investing before they begin, and they shouldn’t feel they have to do it alone. With the right tools and support, investing can be simple, accessible, and far less intimidating than many people expect.”
1 – Vanguard survey of 2,000 UK adults
2 – Vanguard analysis
3 – Vanguard analysis
