One in three cite fear of losing money as barrier to investing, Barclays study finds

Over a third (34 per cent) of non-investors cite the fear of losing money as a key reason for why they have yet to start investing, new research published by Barclays has found.

A study by the bank revealed that just 12 per cent of non-investors expect to begin investing in the next year, and just 13 per cent said they felt encouraged or supported to invest by those close to them.

Barclays was publishing the inaugural findings of its Investment Readiness Index, developed in collaboration with the Centre for Economics and Business Research (Cebr), which aims to highlight where there is the greatest opportunity to grow confidence and participation in UK investing.

When asked about investment risk, respondents estimated a 23 per cent chance that a portfolio of well-known global companies could become totally worthless within five years – an outcome that Barclays called extremely unlikely.

“Our research shows that millions of UK adults already have the building blocks needed to consider investing, yet most lack the confidence to take that first step,” commented CEO of Barclays Private Bank and Wealth Management, Sasha Wiggins.

“Closing this gap will require a shift the UK’s attitudes towards investment risk and a more open and inclusive investment culture. We must give savers clear information, help them to set realistic expectations, and build an appreciation that volatility is a normal part of long-term investing.”

After an initial survey of 3,000 adults in February, Barclays polled consumers again in March and April to understand how the conflict in the Middle East has affected UK investment readiness. While the results did not move the overall index score, confidence in both household finances and the wider UK and global economies had fallen compared to February, while the rising cost of living also caused consumers to re-evaluate their financial circumstances.

In February, consumers estimated that if they lost their main source of income, their cash reserves would last 250 days on average. By April, this had dropped by two weeks to 236 days.

Head of behavioural finance at Barclays Private Bank and Wealth Management, Alexander Joshi, added: “When it comes to building wealth, financial constraints matter, but behavioural barriers are often just as significant. If people believe normal market volatility means their money could be wiped out, they’ll stay in cash even when they have the foundations to begin investing.

“The Index makes some of these behavioural barriers visible and measurable. This can be used to help design clearer information, encourage healthier norms, and develop better decision support so more people feel confident taking steps that could improve financial outcomes over the long term.”

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