UK investment gap: Britons are reluctant to invest out of fear, new research shows
Report from AML suggests financial industry should change the emotional narrative around risk
Investment levels in the UK are among the worst of the world’s richest nations. But what’s stopping millions of Britons from investing isn’t lack of information, its deep-seated fear, according to new research which underlines the challenge the Chancellor faces, following her investment or decline-themed speech at the Labour Party Conference.
UK adults are sitting on a combined £430bn* in savings, even though investing could give them a better chance of boosting their individual wealth and the UK economy.
The report from ad agency AML, conducted in partnership with insight specialists The Nursery, sheds new light on why the UK’s investment gap is the biggest in the G7*.
Fear not fact is the real barrier
AML’s 2025 Investor Index is based on a survey of over 1200 investors and investment ‘Intenders’ (people likely to invest within two years) across the UK.
In the survey, nearly half (48%) of Intenders cited fear of losing money as their number one reason for not investing, almost twice the number who said they didn’t know where to start (27%).
Although low-fee, low-risk investment options are widely available, emotional barriers remain the dominant factor behind the public’s reluctance to invest.
Advertising and communications in the financial sector have tended to portray investment as a gamble and saving as a shield. On the back of the findings in the report AML calls for a new approach.
Challenging the investment myths – the role for advertising
The analysis suggests that the financial industry needs to change the emotional narrative around risk through advertising.
AML calls on the advertising industry to help consumers make the critical emotional shift around investing, confront their fear and build belief and trust.
Chancellor Rachel Reeves has announced that the government is prioritising getting people out of low-interest savings accounts and into investing as part of a strategy to bolster the UK economy.
Research from Barclays and others, correctly highlights the need for clear comparison and product information to boost investing.
But AML’s analysis for advocates for emotional inspiration, not just instruction, at every stage – starting long before consumers are ready to choose products. Although low-fee, low-risk investment options are widely available emotional barriers remain the dominant factor.
Christian Barnes, Strategy Director at AML said: “The conversation has focused too long on rational solutions like education and product design. But our findings clearly show that the average saver is simply not emotionally ready. Advertising has an urgent role to play in reshaping public understanding of risk.
“Only saving – and not investing – may be the riskiest strategy of all. Advertising must convince people that, with inflation long-term investing outperforms cash savings. Our job is to challenge the common misconception that cash is always ‘safe’ and markets are always ‘dangerous’. Unless we address what’s truly holding savers back, they’ll keep looking back in anger – at missed opportunities they were too afraid to take.”
*Barclays analysis (released September 2024) revealed 13 million UK adults are holding £430 billion of “possible investments” in cash deposits.
*The Institute for Public Policy Research said (June 2024) total investment in the UK is “significantly” behind the nearest competitor in the G7 group of wealthy nations.
