- Over a third of Brits said they couldn’t afford to invest in 2023.
- 40% of those who did invest were more confident than the year before.
- The number of people with Cash ISAs increased by 29% YOY.
January 29, 2024: The number of Brits who chose to invest in financial markets fell last year as economic uncertainty and the high cost of living suppressed the market.
According to a recent survey of 2,000 people across the UK from saving and investing app Moneybox, only 26% chose to put their money into something other than a regular savings account or Cash ISA last year, down 6% on 2022 figures.
When asked why they chose not to invest, over a third (36%) said they simply couldn’t afford to, while 1 in 5 (22%) also decided to prioritise saving cash because of the high interest rates they were earning.
Nearly 2 in 10 (19%) of Brits also admitted they were not confident they knew how to invest, while 26% chose against it because they were worried they might lose their money.
Despite this, 40% of those who did invest in 2023, reported feeling more confident about investing than ever before, and 36% of those started investing for the first time last year.
Brian Byrnes, Head of Personal Finance at Moneybox, comments: “While people tend to avoid investing when inflation and interest rates are high, many could be missing out on longer term financial benefits as a result. The research shows many people chose to prioritise savings over investments in the last year, with the number of Brits with easy access savings accounts and cash ISAs increasing by 47% and 29% respectively; perhaps understandably, enticed by the highest cash interest rates in over a decade.
“Undoubtedly for some, this may have been a sensible, considered decision, but many may be surprised to learn that only investing rather than cash savings, would have kept pace with inflation throughout 2023. If you already have a rainy day fund set aside, and you’re looking to 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.”
For those Brits who did choose to invest their money in 2023, half (50%) said it was to build their wealth over time, while a third (36%) also said it was part of their retirement planning.
Another 29% said the reason they invested was to help achieve their long-term financial goals, and provide for their family in the future (27%).
Moneybox’s research, conducted in conjunction with OnePoll, also revealed that the cost of living crisis has encouraged 61% of people surveyed to take greater control of their finances and strive to become financially resilient.
When asked about their financial plans for the year ahead, 31% of Brits are prioritising building up their rainy day funds, followed by investing (18%), 12% of which will be doing so for the first time in 2024.
“For far too long, investing was seen to be inaccessible and confusing, with many people struggling to know how to even get started. Thankfully, this is changing and it’s great to see that people are becoming more confident investors over time,” adds Byrnes.
“Whilst an important first step, becoming financially resilient is about so much more than building a rainy day fund. It requires a longer-term approach toward how we manage our money and plan our finances for the future. Building wealth throughout life is how you become financially resilient and historically investing is proven to be the most reliable way to grow your money over time.”
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Research conducted by One Poll on behalf of Moneybox from December 4th to December 14th, 2023. A nationally representative sample of 2,000 adults across the UK participated in the survey. They did not need to be Moneybox customers.
Moneybox is the award-winning app on a mission to help people build wealth with confidence so they can enjoy life, today and tomorrow. Launched in 2016 by co-founders Ben Stanway and Charlie Mortimer, the company has experienced rapid growth, and today has over £5bn in assets and a community of more than 1 million customers. Moneybox provides a range of great value products and services, across saving, investing, home-buying, and retirement as well as helpful tools and educational content, to help people manage and achieve their short, mid, and longer-term financial goals. Moneybox enables customers to set money aside in the way that suits them best using round-ups, regular deposits, or instant payments. In March 2022 Moneybox raised £35m in a Series D funding round, led by Fidelity International Strategic Ventures, existing investors Oxford Capital, CNP, Burda and Breega, plus new investor Polar Capital. This brings total funds raised by the digital wealth manager to £100+ million.