Investing in stocks and shares may seem a bit “Wolf of Wall Street” to some, but just how much of the UK’s population is invested? We take a look at the breakdown of who’s investing, how they’re doing it and what they’ve invested in.
2.2 million people in the UK (that’s just over 3%) were subscribed to a stocks & shares ISA account in 2019.
13.5% of UK shares are owned by individuals (the rest is owned by institutions like banks and investment firms).
The average stocks & shares ISA account is worth £27,000.
Investors now hold onto their shares 0.8 years on average before selling them. In 1980, the average was 9.7 years, representing a decline of 91.75%.
The London Stock Exchange (LSE) market value experienced its sharpest decline in the last 5 years of 24% in the lead up to the first national lockdown (Dec 2019-Mar 2020).
Who is buying stocks and shares??
The risky world of stocks and shares isn’t for everyone, so who is and who is not buying shares in the UK?
According to our 2020 survey, 33% of Brits own shares.
The most popular reason Brits gave for investing (55%) was because savings accounts offer poor interest rates.
Three quarters of Generation Z (75%) and Millennials (74%) said they would invest after the pandemic, while only 4 in 10 (41%) of the silent generation said they would.
Only 43.5% of these ISAs were held by women (957,000).
Men have slightly more money in their stocks & shares ISAs, at £29,500 compared to £25,800 for women.
Coronavirus and investing
After COVID-19 hit the world and made most of us housebound, many people used their time to invest, or at least to consider it. The results from a Finder survey done in May 2020 revealed that 20% of Brits thought the pandemic was a good time to invest, while equally as many thought to wait a bit longer.
While share trading was once the preserve of an elite minority, the democratisation of trading via online trading and investing apps is leading to a huge number of people now considering investing. Finder’s survey shows that three quarters of both generation Z and millennials (75% and 74%) already have or would consider investing during or after the COVID-19 pandemic. Despite being the generation that you might typically associate with share trading, only 60% of baby boomers said that they would consider investing in the future, while the figure drops to just 41% for the silent generation.
The most popular reason for investing overall (55%) was due to the fact that savings accounts offer poor interest rates. 33% are intrigued by companies that do well and would be more likely to invest if they saw one doing well. 22% found that it was a good time to get involved in investing while many companies aren’t doing well.
I would invest if I saw that a company was doing well
I have easy access to investing platforms
I want to invest in ethical companies
I would invest if I saw that a company wasn't doing well
More people appear to be investing now and I want to get involved
Generational: why do people invest?
Why is the interest in investing higher now than before? Fundamental shifts are happening in retail investing: younger generations seem to be embracing the idea as it becomes more accessible via apps.
Of those who are planning to invest, over a quarter of both generation Z and millennials (28% and 26%) say the market crash has made them more likely to invest over the next 12 months. This is almost three times higher than the silent generation (10%) and significantly higher than baby boomers (16%).
Many generation Z and millennials said that dedicated platforms and apps had made them more likely to invest (27% and 32% respectively).
Millennials are also the group most attracted to dividends; 42% cited them as a reason to invest. Freetrade’s Viktor Nebehaj says, “We’ve noticed that the vast majority of those investing in [dividend stocks] are millennials. They really, really love dividends.”
Women in investing
What is causing fewer women than men to invest in the UK? See our women in investing page for the latest statistics.
Of the 253 fund managers in the sample looked at by Finder, there were more men called Richard, David, Nick or James than there were women.
Around 4 in 10 women (39%) said they had money currently invested in some way (either a share, fund, ETF or private pension). This is compared to around 6 in 10 men (59%).
79% of women aged 18-24 and 60% of women aged 25-34 said they currently hold at least one investment.
35% of women aged 45-54 and 26% of women aged over 55 said they currently hold at least one investment.
There is at least one woman in a management role at 23% of “ethical” funds, compared to just 12% of regular funds.
The stock market is in constant transition, and over time, investor behaviour has changed.
Investors are now holding onto their shares for 0.8 years on average before selling them. In 1980, the average was 9.7 years, representing a decline of 91.75%.
What method has worked out the best so far in 2020? We decided to start the year with £1,000* placed in some of the most popular investments from last year, and in the best savings account available on Finder. Follow our live tracker to see which method is currently on top and use our investment calculator to explore possible returns when investing in these methods.
Most popular ways to invest: Movers and shakers
Fintech is quietly revolutionising retail investing in much the same way that challengers like Revolut, Monzo and Starling Bank have transformed banking – by breaking down the biggest barriers to entry: ease-of-use and cost.
Historically, the share market has been one of the greatest creators of wealth for people around the world, but it’s been limited to those that have access.”
The aptly-named Robinhood was the first to offer commission-free trading for US retail investors in 2015, and this has since been replicated by other disruptors, primarily as a way to attract new customers.
The drop in fees has been accompanied by an “appification” of investing platforms, both among established platforms like Hargreaves Lansdown, AJ Bell and Fidelity, and challengers like Trading 212, Degiro and eToro. The fast-growing challengers still have a long way to go to catch the incumbents, but their influence is changing the whole market.
The next big challenge is engaging a new audience, and it seems the time is right. A survey we ran in 2018 showed that only 22% of Brits owned stocks and shares and 49% had no plans to invest. In 2020, 33% said they owned shares and only 33% said they had no plans to invest. In the space of two years, we’ve seen the proportion of Brits who invest leap by 11 percentage points. This is likely to increase, but it will take work.
Our biggest competitor is not Hargreaves Lansdown, it’s the notion that you should not bother investing. It’s not understanding investing as a lifestyle choice.”
London Stock Exchange (UK) trading: Market value
The London Stock Exchange (LSE) is the main stock exchange in the UK and the biggest in Europe. The total market value of companies trading on the London Stock Exchange fluctuates over time. Since 2015, the highest total market value of London Stock Exchange trading came in December 2016 at £4.58 trillion.
Following this, the London Stock Exchange has been falling in market value. In particular, the London Stock Exchange has taken a nosedive during 2020, due in most part to a mass selling of shares generated by the concerns surrounding the coronavirus pandemic. Since July 2019, the London Stock Exchange has seen a fall of £950 billion (-23.3%).
The Financial Times Stock Exchange 100 (FTSE 100) is the top 100 companies listed on the London Stock Exchange (LSE) and is often used as a gauge of the UK’s business economy. The FTSE 100 includes big names such as Barclays, Vodafone, easyJet and Sainsbury’s.
Over the course of 2020, the FTSE 100 fell by 14.34%, the biggest decline since the year of the financial crisis.
The FTSE 100’s record high was 7,877.45 on 22 May 2018.
The record low was 3,287.04 on 12 March 2003.
The FTSE 100 closed at 6,460.50 in 2020.
Individuals vs Companies: Who owns UK shares?
Shares in the UK are traded on the London Stock Exchange (LSE). These shares are available to buy by any individual or company around the world. So who owns the most?
The number of UK shares owned by individuals has been increasing, with individuals now owning 13.5%.
The majority of shares are owned by people or businesses overseas, at 54.9%.
Rest of the world
Other financial institutions
Private non-financial companies
UK Foreign Direct Investment
Foreign Direct Investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. So how much money has been invested by the UK and into the UK?
Inward FDI fell from £80.6 billion in 2017 to £49.4 billion in 2018.
The USA accounted for the most FDI into the UK, contributing £39.5 billion (80%).
Outward FDI totalled £6.3 billion in 2018, down from £99.5 billion in 2017.
The UK’s highest overall investment was in the Netherlands (£5.4 billion) followed by Hong Kong (£3.9 billion).
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
One way to develop healthy investing habits is to make regular contributions to your investment pot over a period of time, instead of investing a large lump sum. This is called “pound-cost averaging”. It’s a way of investing without trying to time the market.
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