According to recent research, Britain is missing out on a wave of potential investors—over 11 million individuals—who express a willingness to invest but are hindered by a lack of confidence. This insight highlights a significant opportunity being lost due to prevalent misconceptions and knowledge gaps surrounding investing.

The study, conducted by investment powerhouse Blackrock, reveals that more than a fifth of the adult population, about 11.6 million people, are open to the idea of investing yet remain inactive due to these barriers. This untapped potential is further underscored by the finding that approximately 22.6 million savers currently have no plans to invest in the foreseeable future.

Amidst these findings, Chancellor Rachel Reeves has introduced a controversial change in the Budget, announcing a reduction in cash ISA allowances to £12,000 for individuals under the age of 65. This move aims to encourage more retail investing by shifting focus towards other investment vehicles.

However, there is skepticism about whether this strategy will succeed. Critics argue that instead of fostering an investment culture, it might inadvertently encourage savers to park their money in low-yield accounts, potentially stifling the growth of personal wealth.

To fully utilize the £20,000 ISA allowance, savers are now compelled to explore options such as stocks and shares ISAs, Lifetime ISAs with their £4,000 cap, or Innovative Finance ISAs. The changes present a critical juncture for financial education and empowerment, challenging individuals to navigate new investment landscapes.

In the Autumn Budget, Chancellor Rachel Reeves announced that cash Isa allowances would be slashed to £12,000 for under-65s, in a bid to promote retail investing

In order to use their full £20,000 Isa allowance, savers will now have to invest into a stocks and shares Isa or use a Lifetime Isa (which has a £4,000 allowance) or Innovative Finance Isa.

Investing is only recommended for money that you won’t need to spend for at least five years, as this allows time to smooth out the ups and downs of the stock market.  

According to Blackrock, 35 per cent of savers surveyed said they don’t know enough about investing, while 31 per cent were scared of losing money. 

Despite this, 58 per cent of savers said they do want to understand investing.

> Read more: How to start investing – the best platforms for beginners 

This knowledge appears to foster confidence too, with current investors 94 per cent more likely than non-investors to believe they have enough money to retire comfortably.

However, the gap extends beyond know-how, with some 26 per cent saying they don’t have enough money to start investing.

This is despite some 4.3million already saving £272 per month, just below the average of £344 invested each month by current investors.

It is only recommended to start investing once you already have a sufficient emergency fund, equivalent to three to six months of your normal expenses. 

> Read more: I’ve got £10,000 to invest, but I don’t know where to start 

A fifth, 21 per cent, said they were worried about not having access to the money they have invested.

Savers, as a result, are generally unwilling to commit large sums, but some 83 per cent say they would be more likely to invest if they could do so with as little as £1 to £50 per month.

Many investment platforms offer investing from as little as £1.

Henry MacLeod, head of UK digital wealth and co-head of digital distribution EMEA at Blackrock, said: ‘Millions of British people are already doing the hard part – saving regularly. 

‘But with more than £275billion sitting in accounts earning zero interest, this money is neither working hard for these savers, nor for the real economy.’

‘What our survey shows, however, is that with the right support, tools, and education, millions of British people could make their money work harder for them by taking the next step into investing.’

The UK has seen the largest increase in new investors across 14 European markets since 2022, increasing 21 per cent over the period, equivalent to some 3.5million people.

Some 32 per cent of UK adults invest in the UK.

Blackrock says the Government and financial firms need to go further and promote ‘jargon-free education’, make investing more flexible and accessible, and ‘[reframe] Isas as a familiar and low-barrier entry point to investing.’

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