Nearly three quarters (72 per cent) of savers feel they are not confident enough to try investing their money, a new survey has found.
Online investment service Wealthify has revealed that only one in six (16 per cent) people with £5,000 or more already in savings but no investments had considered investing in the past 12 months, despite 58 per cent having saved since the start of the Covid-19 pandemic.
Of those who are not confident about investing, over one in three (38 per cent) said they do not understand how investing works, 22 per cent find the language too confusing and 43 per cent said they are happy with how their cash savings perform.
Lack of confidence was most evident amongst millennials (84 per cent) and women (77 per cent), with both groups saying “not understanding the process” led them to feel this way (53 per cent and 44 per cent respectively).
Overall, seven in 10 (69 per cent) savers said they do not have any long-term savings goals, which is higher amongst men (75 per cent). Meanwhile, younger people (aged 18 to 34 years) are the most likely to have long-term savings goals (73 per cent).
The pandemic may be responsible for driving a short-term outlook for many, with six in 10 (59 per cent) saying they are currently only concentrating on their day-to-day financial situation.
However, the main factors for people who had considered investing were low interest rates on cash savings (47 per cent) followed by money not growing as much as they had hoped (35 per cent).
“The past year has been tough on everyone, both personally and financially for some,” said Andy Russell, chief executive of Wealthify.
“But it is important we don’t let that have a lasting effect on our future plans. Investing offers great opportunities to grow your money over the longer term, so it’s worth taking small steps now to consider your future goals and how you can achieve them.
“It’s frustrating that the complicated way investing is often still explained, and the perceptions of what an investor ‘should’ look like, are stopping so many savers exploring their options.
“Investing can open up opportunities for anyone to build their wealth, so I am committed to breaking the inertia that stops people exploring their options and doing something positive for their future.
“That said, the past year has taught us that we need to be prepared for the unexpected, so savers should always balance access to emergency cash with putting money away for the longer term.
“Before investing, it’s important to have an appropriate rainy day fund, which is usually around three months of outgoings.”