Are you bottling your investments?

20 March 2019
  • Research reveals that people are just as likely to invest in art, antiques, jewellery or wine as they are in the stock market
  • Over half of Brits think you need to invest a minimum of £500 in an investment ISA, while nearly 4 in 10 think that they are taxed at a higher rate than cash ISAs
  • Clare Francis, Director at Barclays Smart Investor, shares her top tips to help bust the most common investment myths

The British public are just as likely to invest their savings in art, antiques, jewellery or wine as they are in the stock market, according to new research from Barclays Smart Investor.

The research, coinciding with the 20th anniversary of the ISA, reveals that only a fifth of Brits (22 per cent) have invested in the stock market over the last 20 years – making it a less well-trodden investment path than art, antiques, jewellery or wine (with 23 per cent investing in one or more).

Whilst this may come as a surprise, the data revealed several reasons why the UK may be shying away from stocks and shares. The more cautious savers were nervous of putting their hard earned cash at risk, with four in 10 (42 per cent) thinking it was too risky a move. More than half (51 per cent) of respondents said they were put off investing through an ISA because they thought they didn’t have enough money, while the same number believed they would have to invest a minimum of £500.

Meanwhile, a whopping seven in 10 (70 per cent) didn’t know the annual ISA limit was £20,000, while four in 10 (39 per cent) thought an investment ISA was not just subject to tax, but taxed at a higher rate than a cash ISA.

With so many myths to bust, it’s no wonder that so few are choosing to invest their ISA allowance. Commenting on the findings, Clare Francis, Director at Barclays Smart Investor, said: Twenty years after the ISA made tax-free saving and investing easier for everyone, it’s clear than many are still reluctant to invest. Whilst the cash ISA has boomed, take-up of the investment ISA remains much lower, despite the potential for greater returns over the long term.

“This is largely down to people thinking that investing in not relevant to them – many see it as high risk and only for the very wealthy or the most financially savvy. But this really isn’t the case - we need to help improve people’s understanding of investing and how it could help them reach their long term saving goals.”

Clare Francis, Director at Barclays Smart Investor, has also shared her top tips on investing, to help dispel some of the myths around stocks and shares and encourage more people to consider if it’s the right choice for them:

1. I don’t have enough money to invest
“Many people think that you have to have thousands of pounds to start investing, but you don’t. You can start from as little as £50 and, if you get into the habit of investing a small amount regularly, you may be surprised at how much it could add up to over time.

 “The amount you can put into an ISA also leads some to think that investing isn’t relevant to them. Whilst the annual ISA allowance is £20,000, don’t let this put you off – you don’t have to invest the full amount, just put away what you can afford as and when you can.

2. Investing is too risky
“Investing is naturally more risky than keeping your money in a cash savings account – stock markets can fall as well as rise and so you could end up losing money. For this reason advisers will often recommend investing for a minimum of five years, to give yourself time to ride out any share price falls.

“It’s also good to diversify and avoid putting all your eggs in one basket. By choosing to invest in a fund rather than buying shares in a single company, you’ll be spreading your money across a number of businesses which helps reduce the risk.”

3. Investing is too expensive
“There are costs associated with investing – even the most simple investment platforms will charge a fee for running the account and usually an additional fee each time you trade. Equally, it’s worth being aware that, if you choose to invest in funds, they will charge an annual management fee, while stamp duty will be charged on any shares that you trade.

“However, the costs could be worth it for some – particularly in today’s low interest rate environment, when it can be tricky to earn a decent return on cash savings.”

4. I am not clever enough to invest
“Whether you’re a financial whizz kid or more of a beginner, consider giving investing a go if you feel the circumstances are right and you have money you can put away for five years or more. Most investment platforms will offer a ready-made selection of investments for those starting out, alongside tips and support to help build people’s confidence and experience.”

5. Investing is only for rich people
“You don’t need thousands of pounds to be an investor. You can start from as little as £50 with many investment platforms. In fact, by drip-feeding just a small amount every month into the stock market, you could build up a sizable nest egg over the long-term.”

Remember, the value of investments can fall and as well as rise; you may get back less than you invest. If you're unsure about investing, seek independent advice.

Research was conducted by 3Gem between 28/02/19 and 03/03/19. The total sample size was 2,000 UK adults. The sample is nationally representative by age, region and gender.

For more information on investment ISAs, how they work and their benefits, visit the
Barclays Smart Investor website.

For further information, please contact:

 Ekaterina Kalinina, Barclays Press Office

+ (44) 20 7116 0818