Millions of Brits are shunning the stock market and holding their wealth in cash, even though most admit they know inflation erodes its value, new research from Scottish Friendly shows.
The survey found 42% of adults keep all their wealth in cash, while a further 15% hold most in cash.
Yet nearly three-quarters (72%) acknowledge that doing so could leave them worse off in the long run.
The top reasons cited were quick access to money (39%), fear of losses (38%) and distrust of markets (34%).
The findings underline the scale of the challenge for policymakers seeking to boost retail investment, both to help savers build long-term wealth and to channel capital into UK growth companies.
Scottish Friendly savings specialist Kevin Brown said the data highlights the “mental gymnastics” many savers go through.
“People in the main understand the risks of keeping their savings in cash over the long term but they nonetheless cannot make the leap to invest,” he said.
“The result is they are making themselves poorer.”
The study revealed notable demographic splits.
- Baby Boomers were the most cautious: 56% hold all their wealth in cash, compared with 44% of Gen X, 25% of Millennials and 21% of Gen Z.
- Distrust of markets was strongest among Boomers (40%), compared with just 23% of Gen Z.
- Fear of losses was more pronounced among women (44% vs 33% of men), while men were slightly more likely to cite distrust of markets (35% vs 33% of women).
- Millennials were the most likely to invest some money but still keep most in cash (18%).
Brown added that reluctance to invest is not just caution but a “deep-rooted fear” of losing money, particularly among older generations.
Younger adults show greater willingness to take some risk but still prioritise liquidity.
“This also affects the economy, leaving domestic companies short of the capital they need to grow,” he warned.
“If Britain is to shift from a nation of savers to a nation of investors, then the industry needs to better educate and provide practical guidance to show that investing isn’t reckless but instead provides greater long-term potential.”
