UK consumers lack confidence to identify as investors
Less than half of Britons who contribute to a workplace pension regard themselves as an investor, in signs of the public’s trepidation over getting involved in the stock market.
Only two-fifths of people investing in pension schemes identify as investors, in spite of the fact that nearly 75 per cent contribute to a workplace pension involving listed equities, according to new research shared with Morning Wire from investment platform Fidelity.
Ed Monk, associate director at Fidelity International said: “The UK has long had a culture of saving rather than investing, a mindset shaped by caution, familiarity and sometimes a lack of confidence.”
“Many people, even those already investing, may be holding back due to misconceptions about what it means to be an investor.”
Wealthy investors only
On average, investors hold more in stocks than in cash savings, holding £126,010 and £80,609 respectively, but nearly 60 per cent of the 1,000 people surveyed identified as an “unengaged” investor, with Monk attributing this attitude to perceptions of investing.
Many UK consumers do not regard investing as a viable possibility for them, with one in five believing investing is only for professionals and 15 per cent believing it is reserved for the very wealthy only.
Chancellor Rachel Reeves announced government plans to get more consumers into buying stocks and shares during her Mansion House speech last week, including working with the financial regulator to provide support for potential investors.
Investing in Gen Z
There are early signs of generational shift in how consumers relate to investing, with 72 per cent of Gen Z, who are typically aged 13 to 28, who actively invest identifying as an investor compared to less than a quarter of baby boomers who are 61 to 79.
The shift highlights the comfortable investing attitude held by Gen Z, with 45 per cent choosing to invest at least once a month, millennials were close behind with over a third investing once a month.
“Younger generations are showing greater interest, and there’s a growing appetite for more active engagement with personal finance,” Monk added.
“It’s vital adults of all ages and life stages feel equipped to make informed investment decisions. Too many people remain on the sidelines.”
He called for “better financial literacy” in order for individuals to “make informed decisions that deliver the outcomes they want”, in particular for those over 50.
“Those in their 50s are often referred to as the sandwich generation, caught between the financial demands of younger and older relatives…this can impact their own earnings and savings potential,” Monk said.