Confidence gap revealed among UK savers

New research published by online investment service Wealthify has exposed a confidence gap among UK savers, with 72 per cent saying they are “not confident enough” to try investing their money. Only 16 per cent of  people with GBP5,000 or more already in savings but no investments had considered investing in the past twelve months, despite 58 per cent having saved more since the start of the Covid-19 pandemic.

More than 38 per cent said they do not understand how investing works and 22 per cent find the language too confusing. 43 per cent of those who are not confident enough to invest said they are, however, happy with how their cash savings perform. With interest rates at a historic low, this could mean millions of people are missing out on opportunities to build their future wealth, by not engaging with other options.
 
Lack of confidence was most evident amongst millennials (84 per cent) and women (77 per cent), with both groups saying “not understanding the process” led them to feel this way (53 per cent and 44 per cent respectively). Despite the increase in accessible financial educational content in recent years, two in five (39 per cent) millennial savers say they do not know where to go to find out more about investing. A quarter (25 per cent) of women also report this, compared to only 15 per cent of men.
 
Feelings of exclusivity remain, as over half (54 per cent) said they do not think investing is for people like them. Moreover, knowledge of the available options was low amongst the group, with almost three in five savers (59 per cent) saying they would “not know where to start”.
 
Andy Russell, CEO, Wealthify, says: “It’s frustrating that the complicated way investing is often still explained, and the perceptions of what an investor ‘should’ look like, are stopping so many savers exploring their options.
 
“At Wealthify, we aim to inspire anyone, regardless of their background or experience, to build their wealth and the future they want. It’s why we invite people to invest from as little as GBP1, and why we stripped away the complexity and jargon from day one. We want to make investing easy to understand, accessible to all, and provide options that allow people to invest their money in a way that suits them.”
 
Overall, 69 per cent of savers say they do not have any long-term savings goals. This is higher amongst men (75 per cent). Meanwhile, younger people (aged 18-34 years) are the most likely to have long-term savings goals (73 per cent), with 66 per cent in this age group saving for a deposit to buy a home.
 
The Covid-19 pandemic may be responsible for driving a short-term outlook for many, with 59 per cent saying they are currently only concentrating on their day-to-day financial situation. Almost half (46 per cent) of savers with no long-term saving goals are putting money away for a “rainy day”, and a further 25 per cent are saving for whatever might be “right around the corner”.
 
The top drivers for people who had considered investing were low interest rates on cash savings (47 per cent) followed by money not growing as much as they had hoped (35 per cent).
 
For those considering their options, Wealthify has launched a free savings calculator on its website for visitors to see what their savings are worth and how that might compare with investing. Plus, customers who open a Plan and start investing before 9 June 2021 will be eligible to enter a GBP20,000 tax-free prize draw.
 
Russell adds: "The past year has been tough on everyone, including financially for many. But its important people don’t let the events of the past year have a lasting effect on how they plan to hit their future savings goals.
 
“Investing can open up exciting opportunities for anyone to build their wealth, so I am committed to breaking the inertia that stops people exploring their options and doing something positive for their future.”