Despite the ongoing conflict in the Middle East, many investors remain hopeful about potential returns, with only a small fraction, roughly one in six, considering withdrawing their funds, according to a recent study.

The survey reveals that 50% of respondents have experienced favorable investment results in the first months of 2026, and about a third plan to boost their investment levels within the next quarter.

Investor confidence remains robust, with 44% expecting strong performance from their portfolios in the spring quarter.

This optimism increases, as 54% of participants anticipate positive outcomes over the coming year, based on findings from Scottish Widows.

Since the United States and Israel launched their invasion of Iran on February 28, the FTSE 100 has seen a 6.6% decline, falling to 10,190 from its record closing high of 10,910.

Similarly, the S&P 500 on Wall Street has decreased by 6.3%, currently standing at 6,450.

Investing changes: Some 71% say they are swayed by the cost of living and household expenses

Markets have been volatile over the past month but hopes have remained high that US president Donald Trump will try to end the war quickly and that the impact on supply chains and prices will be shortlived.

Scottish Widows surveyed 2,000 investors who do not have a financial adviser between 9 and 16 March about their investment habits, opinions, portfolio performance, and recent and planned activity.

Those asked plan to invest an average of £2,920 between April and June, compared with £2,413 in the first three months of the year – and a massive 62 per cent favour UK investments.

The main factor driving investment decisions was a desire to build long-term wealth, cited by 44 per cent, followed by a feeling that it is a ‘good time to invest’, which was offered as a reason by 29 per cent of those surveyed.

Some 24 per cent said they were influenced by UK economic conditions, while 23 per cent were focused on maximising unused Isa allowances.

Regarding their motives for making investment changes during just the past three months, 71 per cent were swayed by the cost of living and household expenses, and 66 per cent by personal financial circumstances

Some 63 per cent said inflation had affected what they did, 50 per cent said UK interest rates, and 49 per cent said Government spending decisions and the last Budget.

Manuel Pardavila-Gonzalez, managing director of investments at Scottish Widows, says: ‘Despite a volatile market, investors demonstrated confidence in the first quarter of 2026 – increasing their investments even with geopolitical headwinds threatening international markets and potential returns.

‘While uncertainty looks set to continue, more bullish investors are driven by their own financial motivations, not just global shocks – looking to increase the amount they invest to grow their wealth, support retirement savings or mitigate the cost of living.’

He adds that his firm’s next quarterly survey will track whether investors’ optimism pays off, or whether events in the Middle East have a cooling impact on markets.

Alec Collie, financial planning expert at Wesleyan Financial Services, says people should not let market volatility put them off making the most of their Isa.

‘The end of the tax year is a crucial moment for savers. Once the deadline passes, any unused Isa allowance is lost forever.

‘Periods of market volatility, like we’ve seen recently, can understandably make investors nervous about topping up their Isa. But staying invested and continuing to contribute regularly is often key to the best results over the long term.

‘Of course, the right approach to investing is highly personal. It’s always important to consider good diversification, and any investments you make need to be aligned with your own personal appetites for things like risk and volatility.’

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