The Leeds Reforms fixed the plumbing – now we’re turning up the tap for retail investors
Building on the structural improvements of the Leeds Reforms, the UK now aims to foster a stronger national investment culture through the ‘Invest for the Future’ campaign, says Karen Northey
One year on from the Leeds Reforms, the UK has made rapid progress on the mechanics of retail investment. The harder task now is cultural: changing how Britain thinks and talks about investing, so that more people feel better equipped to build their long-term financial resilience.
The Leeds Reforms ushered in some much-needed structural changes to remove unnecessary barriers to investment. Reviewing the language that sometimes made investing sound like you were taking a punt on your life savings was important. More balanced risk communications will help people understand investment reward as well as investment risk in a more useful way. Bridging the gap between guidance and advice with the launch of “targeted support” will also help more people take the first steps to invest.
But these reforms only deal with part of the problem, as they improve the plumbing but do not automatically change how people feel when they turn on the tap. For many people, investing feels emotionally different to saving. Saving feels safe and within reach. Investing can feel uncertain and complex. That psychological gap matters. Many people know investing exists and understand that it can be beneficial over the long term, but less than a quarter of savers who do not currently invest feel that it is something “people like me” do, while almost three-quarters say it feels like a big step to take. Yet, they may not realise that, if they’re paying into a pension, they are probably already an investor and it may not be as complicated as they think. In other words, it’s about changing minds, not just the rules.
Confidence gap
That confidence gap is what the Invest for the Future campaign was created to address. Backed by some of the UK’s largest investing and financial firms, the campaign is built on a simple insight: people are more likely to consider investing when it feels like a normal conversation with someone they trust and in language they understand.
At the moment, those conversations are not happening often enough. Although seven in ten investors say they would recommend investing, 69% of people say they rarely or never talk about it. That suggests one of the biggest barriers is the lack of relatable opportunities to hear how other people approached investing and to ask questions without feeling judged or sold to.
That is why the campaign has taken investing out of the City and into everyday places – taxis, coffee shops, florists and local high streets – creating opportunities for people to hear from others who have already taken the first step. The aim is to make investing feel less remote, less intimidating and more connected to real life.
This is not about telling people where or how they should invest, or promoting one type of investment over another. Nor is it about encouraging people to invest all of their cash savings. Holding an emergency cash buffer remains essential. But there are people who may be in a position to do more with some of their money over the long term, and efforts like this are about helping people engage with the subject, ask questions, get to grips with the basics and have a better awareness of their options for when the time is right.
Efforts to build a stronger national investment culture will inevitably draw comparisons with the iconic ‘Tell Sid’ campaign of the 1980s, that encouraged people to buy shares in the newly privatised utility companies. While that campaign was hugely influential and significant, as it made share ownership visible and mainstream, today’s challenge is different. Tell Sid was a very specific moment in time, encouraging people to invest in individual companies. Like ‘Tell Sid’, a national message still matters. But it needs to be supported by repeated, relatable encounters across different channels and communities. And unlike Tell Sid, this is not about one single investment opportunity. The aim is to build familiarity and confidence over time. That means making conversations about investing more common, in ordinary places and in terms people understand.
Last year, the Leeds Reforms set a vital direction. They recognised that change is needed if the UK is to build a stronger investment culture, and a lot of progress has been made. Changing regulation can make the process of investing easier to navigate. But to get more people to engage, we also need to change how they feel about investing.
Our challenge is reaching those millions of people who still see investing as something for someone else. That will require more than changes to regulation. Alongside better rules and clearer support, we need a national conversation that meets people where they are, uses trusted voices and familiar settings, and makes investing feel like something everyone can do, rather than something only other people do. It won’t be a quick fix, but it will be a worthwhile one.
Karen Northey is director of corporate affairs at the Investment Association