UK Government pushes investing as data shows Britons more confused than a decade ago

London — The government is leaning into retail investing as savers face tighter cash-ISA allowances, arguing that investing can protect wealth against inflation and support UK listed companies. In the Autumn Budget, Chancellor Rachel Reeves announced the cash ISA allowance would be slashed to £12,000 from £20,000 for savers under 65, a move the government says will encourage people to use the remainder of their Isa allowance by investing in stocks and shares. Officials contend that steering more saving into investments could help households grow wealth over the long term and provide a boost to the domestic market.

New data from Columbia Threadneedle Investments, shared exclusively with This is Money, shows that Britons remain wary. The survey found 61% of savers say investing is confusing or difficult to understand, up from 44% ten years ago. Among women, 75% report confusion, up from 57% in 2015. The proportion of savers avoiding any investment is roughly unchanged at about 37%, compared with 40% in 2015. Yet average monthly savings rose to £480, from £354 a decade earlier.

Columbia Threadneedle's Ross Duncton cautioned that the persistent confusion sits alongside strong market growth that has broadened the gap between cash and investing. "The number of people who don't invest in stocks and shares remains high—with little change over the last ten years," Duncton said, adding that inflation has eroded the value of cash savings while markets have posted gains. In the long run, investing has shown stronger growth than keeping money in cash. Chelsea Financial Services data indicate UK savers have missed out on about £1.9 trillion in potential returns since 1999. Based on global equities returning about 474% over the past 25 years via the MSCI World Index, versus roughly 80% for cash using the Bank of England base rate, the gap is substantial. The estimate factors in about £856 billion added to cash ISAs since 1999.

This has raised concerns that the Chancellor’s move could backfire, pushing savers toward lower-yielding accounts. Even as some want to invest, many tend to choose products they understand. A Columbia Threadneedle study found 74% would rather pick an investment that is easy to understand—even if it offers lower returns—up from 68% a decade ago. More than half of respondents, 55%, said their confusion stems from the risk involved in investing, while many also struggle with performance data and explanations of how products work.

Duncton emphasized that there is no silver bullet to bridge the confidence gap between cash savings and investing. "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. 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 shows that some 70% of people think financial education needs to begin before secondary school.

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There is broad debate about how best to balance incentives for investing with the need for clarity and protection for savers. Critics say the policy intent—encouraging people to invest in stocks and shares to beat inflation—must go hand in hand with better education and more transparent product explanations. Regulators and advisers are expected to push for clearer disclosures and more accessible guidance, while policymakers weigh the overall design of tax incentives and restrictions. The data point to a persistent tension: a government pushing investing while a sizable portion of the public remains unsure about the basics.

In the near term, observers say the outcome will depend on whether financial education and clearer product explanations keep pace with policy nudges. The summer of data suggests a growing appetite for investments among savers who do understand the risks and benefits, but a large share remains hesitant. The debate over how to close the confidence gap—without dampening enthusiasm for market opportunities—appears set to continue as the regulatory and financial-education landscape evolves.