More than a quarter of investors with more than £25,000 in assets believe stocks and shares are too risky to invest in, according to a recent survey conducted by Rathbones.
The report, which comprised 3,000 respondents, also found that 28% said they lacked the knowledge to manage their investments themselves, while almost a fifth did not know current savings interest rates or investment return levels.
And yet, more than 30% of respondents said they were willing to take on a higher level of risk in pursuit of stronger returns. For the Rathbones team, this indicated many Britons recognised the importance of investing but were held back by misconceptions about risk and a lack of confidence.
Isabella Galliers-Pratt, senior investment director at Rathbones, says: “Risk is one of the most misunderstood aspects of investing.
“Many people assume that avoiding investments altogether is the safest option, but risk comes in different forms.
“While cash can feel secure because its value does not fluctuate day to day, over time inflation can steadily erode what that money can actually buy.”
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Indeed, HMRC data continued to highlight the scale of people’s preference for cash, with around 15 million adult ISA accounts subscribed to during 2023/2024, 66% from cash ISAs. In total, savers contributed £69.5bn to cash ISAs during the period, compared to just £31.1bn in stocks and shares ISAs.
Ruth Bussey, investment manager at Rathbones, added: “Many people still view investing as something separate from saving, rather than as an integral part of a broader long-term financial plan.
“If we want more people to feel confident investing, financial education has to be part of the solution.”
The report noted that while younger generations of investors were more willing to engage with investing, they did not always have the confidence or education to do so
Some 60% of UK adults aged 30 to 44 said they would be happy to take on higher levels of risk in pursuit of higher returns, with more than half saying they would be comfortable investing in higher-risk assets such as crypto or VCTs.
Despite this fact, almost 40% said they lacked the knowledge to manage investments, suggesting it may be an issue of financial education.
Similarly, the research also noted an investment confidence gap between genders, with more than a third of women believing stocks and shares were too risky, versus just 22% of men.
The Rathbones team noted this was consistent with previous research, with men generally reporting higher levels of investment confidence than women since 2024.
See also: Women continue to lag behind men in financial education, confidence and literacy
Bussey concluded: “Building a nation of investors starts with building a nation of financially informed investors.
“That means helping younger generations understand saving and investing from an early age, while also ensuring people of all ages have access to the information they need to make informed financial decisions.”
