More than half (53%) of British savers say they would never consider investing in stocks and shares, Scottish Friendly reports, despite the fact that they could be missing out on better returns. Indeed, with easy access accounts still far below the inflation rate of 2.4%, savers might very well be losing money in real terms.
While 66% are aware that interest rates sit below inflation, this doesn't do much to change people's minds, with 49% stating that they would not invest for fear of losing money. Of course, any investment in the stock market comes with risks, and it's true that people could end up with less than they put in, but on the other hand, they can be sure that they are losing money in a savings account that pays less than 2.4%.
Other findings show that 39% feel more comfortable keeping their savings in cash, while 29% simply save in cash because that's what they've always done and 25% do not believe that investing would be an affordable option for them. This illustrates some of the misconceptions that surround investing, with 28% of respondents viewing such financial products as too complex and 12% put off by investment jargon.
"Attitude to risk is a personal thing and ultimately you shouldn't feel uncomfortable about where you've put your money," commented Scottish Friendly savings specialist Calum Bennie. "If you're waking up with a cold sweat in the middle of the night it's clearly not the right option for you. However, it seems that many savers are not willing to even consider stepping out of their comfort zone to look at possible investment options, which suggests fear is winning out over options that could make financial sense."
Investing doesn't need to be scary. As our guide on stocks & shares ISAs explains, investing in the stock market is a long-term game. If you take your money out every time it looks like the market is going down, you won't be able to recover those losses when the market eventually goes up again.
Advice can make all the difference, and there are plenty of experts out there who know how to explain things in plain English. A look at our stocks & shares ISA page will furthermore show you that there are plenty of different options out there, with some giving you more control than others, depending on what you want to do.
"Investing doesn't have to be scary, or complicated, or only for the wealthy; it's for everyone," concluded Calum. "It is a tool that is readily available to all that could help empower financial well-being and could be well worth considering at the very least. Don't let fear stop you from considering ways that could make your money work harder."
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