Making financial decisions can be daunting, but for
many UK savers, investing is among the most difficult. A new Barclays study reveals that nearly two in five
people (38%) rank investing among the toughest life choices higher than career
changes or major purchases.
Why Are People Afraid to Invest?
The study highlighted two major reasons why UK adults
avoid investing: lack of knowledge (44%) and fear of losing money (41%). This
hesitation often results in long delays, an estimated 1.5 million current UK
investors waited more than a year before making their first investment.
However, for younger generations, the dream of
homeownership takes priority over long-term investing. Nearly half (45%) of
18-34-year-olds say their primary financial goal is saving for a house deposit,
compared to just 26% of the general population.
Meanwhile, only 26% of young adults prioritize
retirement savings, compared to a national average of 42%. This trend raises
concerns that the UK’s “pension gap” may widen as younger generations
delay or deprioritize retirement investing.
Sasha Wiggins, CEO of Barclays Private Bank and Wealth
Management, emphasizes the importance of reducing investment barriers: “Lack of
clarity and practical advice is preventing savers from engaging with investing,
leaving £430 billion of possible investments remaining in cash savings.”
“The industry needs to work with government and regulators to break down these barriers and help more savers invest. Key to
this is regulatory change. A more balanced environment is needed, one that
protects investors but also allows financial providers to deliver more targeted
support, without crossing the boundary between guidance and advice.”
What Finally Pushes People to Invest?
Many first-time investors make the leap due to
influence from friends and family (26%), a specific financial goal (23%), or
guidance from financial advisors (23%).
Others are prompted by a sudden lump sum, 20% of the respondents started investing after receiving an inheritance or a divorce
settlement. These findings suggest that many people only invest when external
factors force them to take action, rather than proactively planning their
financial future.
This article was written by Jared Kirui at www.financemagnates.com.
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