A persistent lack of confidence in retail investing could be costing British individuals a substantial sum, as people continue to favour the security of cash savings.
Reluctance to enter the stock market might result in people forgoing an average of £37,000 compared to investors, according to savings platform Moneybox's financial confidence index, as reported by .
Survey participants indicated they felt more at ease depending on cash savings to accumulate wealth, with 84 per cent of the 4,015 individuals surveyed expressing confidence in this approach, rising from 79 per cent in 2024.
This increasing shift towards cash was highlighted by just 11 per cent of individuals choosing to move their money from savings to active investments.
Need to know the basics
Investor sentiment regarding the stock market can be linked to insufficient knowledge about investing, with two-fifths suggesting they would feel more at ease if they understood the fundamentals.
Likewise, over a quarter indicated they would feel more confident if they received advice from a reliable source, such as a financial adviser.
In her recent Mansion House address, the Chancellor outlined the government's new initiative to enhance investor confidence by presenting it in a "positive light" to achieve a cultural transformation.
The initiative follows the failure to enhance financial literacy, which also caused the economy to suffer and forfeit significant capital. An estimated £137bn could be released from retail investments if financial confidence improves throughout the º£½ÇÊÓƵ, research from Moneybox suggests.
Brian Byrnes, head of personal finance at Moneybox, said: "With the government pushing for a shift towards investing... regulatory change must go hand-in-hand with boosting the financial confidence of the nation."
"People won't act on what they don't understand."
Barriers to investing
Yet for some, the hurdles to accessing the stock market extend beyond insufficient confidence and understanding.
Almost 40 per cent of participants voiced worries about potential financial losses should a share perform poorly. A deep-rooted perception that active investing carries inherent risks is driving people towards conventional savings accounts.
A third felt uncomfortable with the unpredictability and volatility associated with stock market investment.
However, not all investors are shying away from active investing, with the index showing that confidence has risen to 39 per cent from 33 per cent in 2024.
Value cash savings to encourage investment
To maintain growing confidence levels, Byrnes emphasised the significance of recognising the "value of saving" whilst continuing to promote investing and enabling individuals to achieve their desired returns.
He said: "Both saving and investing play a vital role in building wealth and financial security, depending on a person's goals and circumstances."
"The real priority should be equipping them with the knowledge to choose what's right for their situation, so they feel confident using the full range of options available to them."
