Confidence, not capital, appears to be the main barrier to wider participation in investing across the UK. According to the Financial Confidence Index 2025 by Moneybox, a significant disparity exists between those who feel secure in their financial knowledge and those who do not.
This shortfall in engagement has wider implications not only for individuals’ long-term wealth but also for the broader economy. Despite long-term investments typically offering stronger returns than cash savings, many still opt to hold onto cash due to lingering uncertainty and misconceptions around investment risks.
Lack of Understanding Undermines Investor Participation
According to the report, financially confident individuals hold, on average, £37,000 more in investments than those who lack confidence—regardless of income level. This indicates that understanding and comfort with investing may be more influential than salary or savings in shaping behaviour.
Fear of financial loss continues to be the most commonly cited concern, with 38% of respondents expressing worry about market downturns. This fear is less prevalent among younger adults aged 18–24, only 22% of whom named loss as their main concern. For this group, the more significant barrier is knowledge: 26% stated they did not understand how investing works.
Broader data supports this trend. A third of all respondents admitted lacking sufficient knowledge, while 33% said they felt uneasy about the unpredictability of investment markets. Additionally, 22% viewed investing as inherently risky—highlighting the influence of long-held perceptions over evidence-based decision-making.
Moneybox Head of Personal Finance, Brian Byrnes, commented: “With the Government pushing for a shift toward investing, our data shows that any regulatory change must go hand-in-hand with boosting the financial confidence of the nation. People won’t act on what they don’t understand. While reforms like the Advice Guidance Boundary Review are a positive step, more needs to be done to close the confidence gap, incentivise positive behaviour and help people make smarter financial decisions throughout life.”
Public Support for Investment Education and Guidance
The index reveals that 40% of respondents would feel more confident investing if they had a basic understanding of how it works. Meanwhile, 27% indicated that receiving guidance from a trusted source would increase their willingness to participate.
This need for accessible, trustworthy information aligns with recent regulatory developments, including the Government’s Advice Guidance Boundary Review. Despite modest improvements—investment confidence rose from 33% in 2024 to 39% in 2025—savings remain the preferred option, with 84% of people confident in saving and only 11% having moved money from savings into investments since January.
According to Byrnes, both saving and investing are important to long-term security. But unlocking more of the UK’s investment potential will require a national effort to increase understanding and trust in the system.
