Mind the gap: Study shows savers are 94% worse off than investors
A substantial investment gap has opened up between those who opted to save and those who decided to invest over the last 10 years.
According to a survey by online investment platform Charles Stanley Direct, those who save in cash accounts are on average 94 per cent worse off than their counterparts.
For example, £10,000 invested in global markets in 2010 would now be worth approximately £30,742, compared to £11,230 in a savings account.
The researched showed the main reasons people consider investing are: Poor returns on cash savings, saving for retirement, or saving for a house.
However, this does vary depending on demographic.
Barriers to investing
Despite an appetite to invest, the survey showed that there are some significant barriers preventing people from doing so.
Financial jargon was considered the biggest barrier, with 55 per cent of people saying they had been deterred from investing because they were not confident dealing with financial terminology.
Of the financial terminology often used, only 45 per cent said they fully understood inflation, and just over 35 per cent know and understand what dividends are.
The second biggest deterrent was unease about the potential risks of investing, as 40 per cent said they were concerned about market volatility.
This was followed by worries over the complexities of investing, with 20 per cent saying they found it too challenging to keep on top of all the data.
“Transferring some savings into investment products like a stocks and shares ISA can make your money work harder, but we know that taking those first steps on the investment journey can be a daunting experience. That’s why we’re helping UK savers find the confidence to close that investment gap,” says Rob Morgan, investment analyst at Charles Stanley Direct.