Many Happy Returns Cash on the Sidelines: Are Brits Scared to Invest?
24 snips
Sep 25, 2025 Brits are stashing over £100 billion in ISAs, yet two-thirds of it is just sitting in cash. The hosts delve into why a mix of fear, cultural attitudes, and complex financial systems keep people from investing. They explore the demographics of investors, revealing stark gender and age gaps in investment habits. Plus, a surprising look at cash's volatility compared to inflation brings clarity to common misconceptions. They'll also discuss how targeted support could reshape attitudes and enhance financial education!
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Tortoise vs Hare: Cash Wins Comfort
- Brits favour cash ISAs heavily despite long-term underperformance versus equities.
- Equity volatility scares savers even though equities typically win over long horizons.
ISA Flows Tilt Toward Cash
- HMRC data: two-thirds of ISA contributions in 2023–24 went into cash ISAs.
- Higher bank rates and tax-free interest attractiveness explain much of the shift.
Stocks Dominate ISA Stock Over Time
- Although recent flows favour cash, accumulated ISA stock is majority in stocks and shares.
- Stocks outperform over time so earlier equity allocations compound into larger balances.