UK Government pushes investing as confusion among savers rises, data show
Autumn Budget cash ISA cut aims to boost investing, but new study finds Britons are more unsure about stocks and shares than a decade ago.
The government has stepped up its push for retail investing in the autumn budget, cutting the cash ISA allowance to £12,000 for savers under 65 as part of a broader strategy to encourage households to use the rest of their ISA allowance for stocks and shares. The Treasury argues that channelling more money into investments could help Britons grow wealth ahead of inflation and support UK-listed companies, while preserving savers’ overall tax advantages.
Columbia Threadneedle Investments, in data shared exclusively with This is Money, found that despite the policy emphasis, confidence about investing remains fragile. The survey shows that 61% of savers say investing is confusing or difficult to understand, up from 44% ten years ago. Among women, the figure rises to 75% from 57% a decade earlier. The firm notes that the share of people who avoid investing altogether is little changed from ten years ago, at about 37% (versus 40% in 2015). At the same time, average monthly savings have risen from £354 to £480, underscoring a growing gap between cash accumulation and willingness to invest.
Long-run evidence suggests investing has better growth potential than cash. Chelsea Financial Services estimates that UK savers have missed out on about £1.9 trillion in returns since 1999, with global equities up around 474% over the past 25 years versus roughly 80% for cash, based on the Bank of England base rate. The calculation also reflects roughly £856 billion added to cash ISAs over that period. Yet the policy shift has raised concerns that savers will opt for lower-yielding options rather than take on perceived investment risk.
Even as savers confront higher inflation and a volatile market to preserve purchasing power, a sizeable portion prioritises understandability over potential returns. Columbia Threadneedle’s data show that 74% of consumers who want to invest would choose an option that is easy to understand rather than one with better returns but harder to grasp, up from 68% a decade ago.
Experts say there is no single fix for the confidence gap, and that basic education is part of the answer. About 55% of respondents said their confusion stems from the risks involved, while almost four in 10 want simpler explanations of products and performance data. "Our research shows that there is no one silver bullet to bridge the confidence gap between cash savings and investing, but ongoing efforts to provide clear, simple, consistent and accessible guidance remains crucial," said Ross Duncton, head of direct at Columbia Threadneedle Investments. "The findings also point to the importance of financial education starting at an earlier age, alongside more open conversations to help build confidence and knowledge. The important thing is to get comfortable with the process—the earlier people start, the more familiar and less daunting investing becomes." The data even suggest that roughly seven in ten people think financial education should begin before secondary school.
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Taken together, the data and policy moves underscore a tension in the UK market: the government seeks to promote capital formation and support listed companies, while a significant share of savers remains reluctant or unsure about investing. The outcome could hinge on how quickly financial education and clearer product explanations can reach ordinary savers, particularly those who prefer simple, low-risk options in an inflationary environment.
