The amount of UK residents who opted to invest in financial markets dropped last year as economic uncertainty and the high cost of living suppressed the market.

Research from the saving and investing app Moneybox found only 26% of people invested in the markets in 2023.

This figure was down by 6% compared to 2022.

The main reason people did not invest came down to cost, with 36% saying they simply could not afford to.

Just over a quarter (22%) said they wanted to prioritise saving cash due to the high interest rates they were earning.

However, 19% said they chose not to invest as they lacked the confidence to do so, while 26% decided against it because they were worried they might lose their money.

Of those who did decide to invest in financial markets, 40% reported feeling more confident than ever before.

In total, 36% of them started investing for the first time last year.

Half of British investors said they did so to build their wealth over time, while over a third (36%) said it was part of their retirement plan.

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%).

The research also revealed that the cost-of-living crisis has encouraged 61% of people to take greater control of their finances and strive to become financially resilient.

In regards to the rest of the year, 31% of those surveyed said they are prioritising building up their rainy-day funds.

Overall, 18% said they would be investing money in 2024, 12% of which will be doing so for the first time.

Moneybox head of personal finance Brian Byrnes said: “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 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.

“While an important first step, becoming financially resilient is about so much more than building a rainy-day fund. It requires a longer-term approach towards how we manage our money and plan our finances for the future.

He added that “building wealth throughout life is how you become financially resilient” and “historically, investing has proven to be the most reliable way to grow your money over time.”

One Poll, on behalf of Moneybox in December 2023, spoke to 2,000 UK adults to get these insights.


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