Investments – why aren’t more of us considering this as a valid form of income?

The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.


Could post-Brexit Britain be a good time to start putting back into our own economy? Interest rates recently dropped to an all-time low of 0.25% – a figure not seen in the Bank of England’s 300+ year history, so with poor returns on traditional savings accounts, why aren’t more of us planning to change our saving and investment behaviour?

Scottish Friendly’s quarterly Disposable Income Index report, which has been compiled in conjunction with leading think-tank the Social Market Foundation, reveals that less than 1 in 5 Brits are in receipt of income from investments. Which means the vast majority of people in the UK have yet to take the plunge and consider an investment product.

So why are people so reluctant to invest? And will Brexit have an effect on people’s propensity for putting some money away for their future?

From the numbers, it’s evident that there are grave concerns throughout the UK in the wake of Brexit. Nearly a half of respondents had concerns about rising costs and goods becoming more expensive, whilst over a quarter feared job losses.

And 40% claimed to be concerned about the onset of yet another recession.

However, a surprisingly high 1 in 3 of those surveyed had no concerns about the UK leaving the EU.

But how has this affected the nation’s appetite for saving or investing their hard earned pounds?

Three quarters of respondents said there would be no effect on their saving and investment habits, whilst 5% said they would save or invest less and 12% would save or invest more. 6% said they would save or invest in different ways.

But let’s dig down into what people are actually doing with their disposable cash – are they saving – or investing.

Just over half of all respondents claimed to regularly save or invest each month.

A large chunk, 55%, are saving their money in a traditional bank or building society savings account – and 41% are actually saving their money in a current account. And at times of record low interest rates, it could be hard to see what the appeal is here.

In terms of investment products, only 16% have a stocks and shares ISA (compared to 42% with a cash ISA), whilst those with shares / unit trusts or investment trusts account for 8%.

So why, in times of low interest rates and, at the time of writing, with the stock market seeming to have recovered from a post-Brexit fall and in reasonably good health, are the general public still so reticent to invest?

Well there could be a number of factors at play, such as the following:

Attitude to Risk

Investments, by their nature are a risk, and in general people are averse to risk. However, an investment, such as a Stocks and Shares ISA, if you are considering putting your money away for the long-term, could offer greater growth potential than cash savings, particularly in these times of extremely low interest rates. Cash savings are of course generally secure where the value won’t fall over time. The value of investments can go down as well as up and you could get back less than you have paid in.


In the UK, a large part of the general public generally view investments as products only for the well-off and well advised. And whilst this may have been the case in the past, providers such as Scottish Friendly now offer investments starting from as little as £10 per month, allowing a broader range of people to get started with investing.


It may sound harsh, but in these busy times, many people may not have time to pore over their saving or investment options. Many may find it confusing and perhaps the easiest thing to do is put money away in a Cash ISA with the bank – or even saving in a current account. Security may be just as important to customers using these savings vehicles, too. However, with all-time-low interest rates now a reality, the rate of inflation could outstrip the rate of interest on these accounts, meaning that in real terms, they are actually losing money. It might take longer to look into investment options, but it could be time well spent that could pay off in the long run, although as mentioned above, there are no guarantees as stock market investments can go down as well as up and you could get back less than you pay in.

Hopefully this has given an insight into the saving and investing habits of the UK – and gone some way to considering why so few are choosing investments as an alternative or in addition to cash savings.

Want to get more insight into the spending and saving habits of Britain? Why not take a look at Scottish Friendly’s Insights Hub.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.