Ian Anker, 56, has always known the value of money. 

His parents – his mother working in administrative roles and his father in ‘various jobs’ before becoming a teacher – instilled in him the importance of having savings.

After failing his A-Levels and going to work at what was Midland Bank in the mid-1980s, Anker became the first person in his family to go to university.

Since then, he’s worked his way up through a series of IT jobs and is now a management consultant earning £54,000 a year, pushing him into the higher income tax bracket.

But despite his success and commitment to saving, Anker only started investing this year. 

He’s not alone. Anker is one of a million ‘self-mades’ – those who have a modest upbringing, and are less likely to invest despite being among the country’s highest earners.

Self made: Ian Anker came from humble beginnings and is now a high earner

Santander UK and the Centre for Economics and Business Research (CEBR) say that self-made individuals are sitting on £40.7 billion worth of cash savings – or an average of £40,000 – that could be invested.

While Ian went to university, self-mades are twice as likely as other high earners to leave school and head straight into work or apprenticeships, and more likely to work in construction and skilled trades.

Some 28 per cent of ‘self-mades’ don’t invest their monthly earnings at all, compared to 15 per cent of other high earners.

Those that do invest typically put in 11 per cent of their income, compared to the average 17 per cent of their peers.

How talking about money can affect your wealth

One of the biggest differences between the two groups is the lack of conversations about money growing up.

Anker says that while he ‘didn’t feel we were wanting for anything, we didn’t have lots of money’. He was encouraged to save, but there was little discussion about investing.

He says: ‘My two older brothers and I were all encouraged to save. I’ve always thought it’s important to have some savings and tried to live within my means. 

‘I’ve always recognised the need to have savings for emergencies, and if I want to go on holiday, I always make sure I’m saving and paying for it, rather than putting it on the credit card.’

Santander and CEBR’s research shows that just 52 per cent of self-mades spoke about money at home, compared to 74 per cent of high earners in general.

It means that only 45 per cent say they consider themselves financially savvy or literate, despite 13 per cent owning their own business.

And while almost half say they know investing is important, 22 per cent say they don’t know where to start.

Santander says it indicates that early financial conversations and education are more of a barrier to lower-income households, which places them at a disadvantage when trying to build wealth in adulthood, even if they are higher earners.

Risk-averse: Santander and CEBR say 28% of ‘self-mades’ don’t invest their monthly earnings at all, compared to 15% of other high earners

Is it better to invest or have cash?

Anker had largely avoided investments, other than an insurance policy that gave him some shares, before this year. But after three years as a management consultant, he thought he’d turn his hand to investing.

The father-of-three had already opened a cash Isa with the investing platform Trading212, but opened a stocks and shares Isa five months ago as an ‘experiment’.

After watching some Youtube videos and reading online, he learned that over the long term, fluctuations in markets ‘generally always smooth out.’

‘I then decided I was going to try it. I aim to retire in 10 years, which is a long enough period that I can do this for at least the next 5 years.’

While it comes with its risks, savers can often grow their pots more effectively if they consider investing their money instead of holding cash.

Figures from Vanguard show that a savings pot of £10,000 at the end of December 1998 would have risen to just over £19,000 over the past 26 years, a 90 per cent increase when not adjusted for inflation.

In comparison, the same £10,000 invested in a globally diversified portfolio, would have increased by more than 650 per cent to over £75,000.

Anker is aiming to set aside between £200 and £300 a month, with two-thirds going into his cash Isa and the rest into his stocks and shares Isa. He aims to put another £100 into his savings from next year.

He is already beginning to learn about what has and hasn’t worked, moving some of his money into European defence companies, as well as renewables and tech. He is mostly focused on European and UK-based companies.

‘I’ve recognised the importance of trying to spread the companies across lots of sectors, so hopefully it will even itself out,’ he adds.

His portfolio has already grown 5 per cent, which is more than current cash Isa rates. Moneyfacts data shows that the average 1-year fixed cash Isa rate is 3.95 per cent, while the easy access Isa is 2.93 per cent.

Like his parents, Anker says he and his ex-wife have ‘always instilled in our children the importance of saving and having money just in case.’

Despite his recent foray into investing, he is more cautious about encouraging his three daughters to invest as they are trying to build house deposits. 

‘I’m conscious the world is in a different place. They can’t afford their own houses. I’d be loathe to say they should put money in a stocks and shares Isa in case they might make a loss on it.’

Santander is calling on the Government include financial education as part of apprenticeship schemes, to give future self-mades the ‘best chance for financial success’.

Kitty McCormick, head of wealth at Santander UK said: ‘This is a story of unlocking potential. It’s more than just a missed opportunity for individual growth; bridging the investment gap among the self-mades through targeted financial education could inject billions into the UK economy, with benefits for communities and the wider economy.

‘The self-mades have proved their earning potential. Now it’s time to back them with the tools, knowledge and confidence to make their income work harder for them.’

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