We’re finally seeing a welcome boost to the number of investors in the UK. We’ve been tracking the proportion of the UK population that save and invest for the last decade. The COVID-19 pandemic seems to have been the catalyst for many people to finally open an investment account.

Our UK Consumer Insights report, published this week, found that 42% of UK adults (aged 16+) currently hold some form of risk-based investments, excluding workplace pensions. That’s up from only 29% at the end of 2018 – a proportion that had remained stubbornly low over the decade that we’ve been conducting this research.

Some of this will be down to additional disposable income thanks to people being stuck at home. Some people have realised they need to build a better safety net. We’ve also had encouragement from government policies such as auto-enrolment and Lifetime ISAs.

Brand awareness is also up this year, reflecting higher engagement with investment services and higher marketing spend from the likes of Abrdn, Hargreaves Lansdown, PensionBee and Vanguard (to name a few). Banks are often regarded as the entry point for new investors, but awareness of many investment-specific services have seen decent percentage-point gains over the last year.

The challenge to the industry is to ensure this becomes a longer-term cultural shift in savings behaviour rather than a flash in the pan. Rising inflation will be a double-edged sword for the industry. One the one hand, more money should move from cash savings to investments to better keep pace with rising prices. On the other hand, we’re likely to see a fall in the household savings ratio, which has been strongly correlated with investment inflows over the last two years.

UK Consumer Insights is an annual report that’s available to subscribers to any of Platforum’s UK research. Please get in touch for more information.