Only a quarter of British people chose to invest last year, while savings received a boost

THE NUMBER of Britons choosing to invest their money in shares fell last year as economic uncertainty and the high cost of living suppressed the market.

Research among 2,000 adults in the UK found that only 26 percent chose to put their money in something other than a regular savings account or cash ISA last year, a drop of six percent on 2022 figures.

More than a third (36 percent) said they simply couldn't afford to invest and 22 percent decided to prioritize saving because of the high interest rates they could get.

Nearly two in ten (19 percent) admit they are not confident they know how to invest, while 26 percent don't because they fear losing their money.

However, of those who did invest last year, 40 percent said they felt more confident investing last year than ever before.

And 36 percent of these started investing for the first time last year.

Brian Byrnes, head of personal finance at savings and investment app Moneybox, who commissioned the studysaid: “The research shows that many people have prioritized saving over investment over the past year, perhaps understandably tempted by the highest cash interest rates in more than a decade.

“For some, this has undoubtedly been a sensible, informed decision, but many may be surprised to learn that investing alone, rather than saving cash, would have kept pace with inflation through 2023.

“If you already have a rainy day fund set aside and are looking at the long term, investing is one of the best ways to grow your money over time.

“Saving and investing should both be viewed as essential components of a financial plan that will help you achieve your short- and longer-term financial goals.”

Of those who chose to invest in the past twelve months, the most common motivation was to build wealth for the future (50 percent).

And 36 percent invest in a more comfortable pension.

Nearly three in ten (29 percent) are investing to help them achieve their long-term financial goals as quickly as possible, while 27 percent want to grow their money to provide for their family in the future.

The survey, conducted via OnePoll, also looked at the impact the crisis has had on the cost of living – and 34 percent said it has made them think about how they can become more financially resilient.

Looking at their financial plans for the coming year, 31 percent prioritize building a rainy day fund, while 12 percent are committed to setting clear financial goals and plans to achieve them.

And another 12 percent want to kick-start their investment journey in 2024.

Brian Byrnes of Moneybox adds: “For far too long, investing has been seen as inaccessible and confusing, with many people struggling to know how to even get started.

“Thankfully this is changing and it's great to see people becoming more confident investors over time.

“Because the truth is that becoming financially resilient is about so much more than building a rainy day fund, although that is a very important part of it.

'It requires a long-term approach to the way we manage our money and plan our finances for the future.

“Building wealth over a lifetime is how you become financially resilient, and historically, investing has been the most reliable way to grow your money over time.”