I’m a little embarrassed to admit that, before joining Money Marketing, I had never invested a penny in my life.
It certainly wasn’t through a lack of desire – in fact, I’d always been quite excited by the idea.
During my late twenties and early thirties, in particular, I spent hours trawling through websites, trying to make sense of it all.
For starters, I didn’t think I had enough money; I wasn’t really sure where to start and I was afraid that I might end up losing the cash I’d saved.
Inevitably, I did what a lot of people do when they feel overwhelmed – I let the fear of failure hold me back and told myself I’d do it another day.
Last week, some research from Barclays landed in my inbox that caught my eye and revealed I’m definitely not the only one.
The study shows that, on average, people take just over three-and-a half-months to start investing from the point they first considered it. An estimated 1.5 million (8%) wait over a year.
For me, it was closer to three-and-a-half years than three-and-a-half months.
On average, people take just over three-and-a half-months to start investing from the point they first considered it
It was only through immersing myself in this job and the world of investments that I felt ready to “take the plunge”. Now I have, my only regret is that I didn’t do it sooner.
So, what is causing this ‘decision paralysis’, as Barclays describes it?
According to the research – and like my former self – the two biggest perceived barriers that stop people investing are a lack of knowledge (44%) and a fear of losing money (41%).
In fact, 38% of the 2,000 people the bank surveyed said deciding how to invest money was the second hardest decision in life, topped only by where to buy a house (42%).
The implications of this decision paralysis among would-be investors is not only affecting their ability to grow their money; it’s also holding the economy back too.
Barclays estimates there is £430bn sitting in the savings accounts of 13 million UK adults that it believes could be invested.
There’s no doubt it’s a volatile, unpredictable and pretty scary world at the moment.
The re-election of Donald Trump and the subsequent ‘Trump tariffs’, Russia’s continuing war on Ukraine, the Israel-Palestine conflict… the list goes on.
With so much geopolitical uncertainty, you can hardly blame anyone for being sceptical of investing for the first time.
Even the so-called ‘Magnificent 7’, seen by many non-experienced investors as being a safe bet, isn’t immune to outside influences.
As proved by the recent DeepSeek AI saga, which wiped billions of pounds of NVIDIA’s value, even the ‘big boys’ are vulnerable and no stock is bulletproof.
So, what, if anything, will make people change their minds?
The Barclays research shows influence from friends and family was the main catalyst for starting to invest (26%).
This is followed by wanting to achieve a specific investment goal (23%) and guidance through financial advice (also 23%).
If the primary reasons for people not investing are fear of losing money and a lack of knowledge, it’s clear more needs to be done to educate people about the benefits.
Sasha Wiggins, CEO of Barclays private bank and wealth management, says the bank is determined to make the decision to invest simpler and more accessible.
Barclays says investing decision paralysis in the UK is also exacerbated by current industry regulation, which limits how banks can support would-be investors.
It has therefore set out five key recommendations to close the UK’s investment gap.
These include the FCA creating a ‘badge’ to identify entry-level investment products and a simpler sign-up journey for entry-level investments.
It is also recommending that the government and FCA should alter the regulatory framework for the provision of financial guidance.
This new regulatory framework, Barclays says, should explicitly permit consumer-facing guidance based on generic personas such as “people like you would benefit from X”.
Quite often, when one person jumps, others will follow suit. If no one jumps, nothing will happen
Most people, naturally, are followers.
It’s like that scene in Titanic, where Kate Winslet tells Leonardo Di Caprio “You jump, I jump” as the ship starts sinking below the icy waves of the Atlantic.
Quite often, when one person jumps, others will follow suit. If no one jumps, hoping things will get better, nothing will happen.
It’s just a question of how we get that first person to jump.
Clare Francis, director of savings and investments at Barclays Smart Investor, says: “We have to help people recognise the valuable role investing plays when it comes to growing their money, and that it isn’t as complex and daunting as many believe it to be.”
Getting them to realise it is one thing. But giving them the incentive to do so is another entirely.
Rachel Reeves’ decision to increase the main rates of capital gains tax from 10% and 20% to 18% and 24% in her Autumn Budget has done little to encourage them.
This is perhaps evidenced by the amount of money being poured into Cash Isas in the first few months of 2025.
If Labour’s plan is to grow the economy and get people investing, they need to buck their ideas up, because at the moment it’s not really working.
