Decision paralysis: two in five say investing is one of life’s toughest decisions

• An estimated 1.5 million current UK investors waited over a year to start investing, giving their money less time to potentially grow and multiply
• The biggest perceived barriers are lack of knowledge (44 per cent) and fear of losing money (41 per cent)  
• Due to the current housing market, the biggest focus for younger adults is saving for a housing deposit not long-term investing for retirement  
• After making their first investment, one in three say they felt financially empowered, a sense of pride, and ‘grown up’  
• As the FCA considers proposals for the Advice Guidance Boundary Review, Barclays is calling for changes to empower would-be investors to overcome decision paralysis, and to make investing as simple and accessible as possible  

New research from Barclays¹ reveals how decision paralysis – the inability to decide out of fear of making the wrong choice – is holding UK savers back from making their first investment. After building up sufficient savings, delaying that first step into investing means their money has less time to grow and multiply over the years. The findings reinforce the Bank’s policy recommendations to enable firms to better support the estimated 13 million UK adults who hold an estimated £430 billion of “possible investments” in cash deposits². 

Barclays surveyed 2,000 UK investors to find out what persuaded them to invest for the first time, as well as any challenges they felt they had to overcome. Nearly two in five (38 per cent) said that deciding how to invest money is one of the top three hardest decisions in life, ranking it ahead of where to take your career (28 per cent), deciding if to use savings to buy an expensive item (23 per cent), and whether or not to retire (16 per cent). The only decision that ranked higher was where to buy a house (42 per cent).

There are multiple factors that are preventing investors from taking the plunge, the most common being a lack of knowledge about how to invest (44 per cent), followed by a fear of losing money (41 per cent).

On average, UK investors say it took them just over three and a half months to start investing, from the point they first considered it. However, nearly one in 10 (8 per cent) – the equivalent of over 1.5m UK investors³ – report that the decision took over a year.

Investment inspiration

Influence from friends and family was the main catalyst for starting to invest (26 per cent), followed by wanting to achieve a specific investment goal (23 per cent) and guidance through financial advice (23 per cent).

One in five (20 per cent) said they were spurred into action after receiving a lump sum of money, such as an inheritance or a divorce settlement. This suggests that plenty of investors enter the market while going through difficult and challenging circumstances, which reinforces the need for further industry support.

Gen Z and millennial motivations

The current challenges in the housing market are also impacting the financial goals of younger investors. Saving for a housing deposit was the most common initial investment goal for those aged 18-34, cited by nearly half of respondents (45 per cent), compared to a national average of 26 per cent. Conversely, building a retirement fund was only a goal for 26 per cent (vs. a national average of 42 per cent).

This not only suggests that younger generations view a housing deposit as a goal that can only be achieved over several years, but also raises the possibility that the UK’s “pension gap” may be widening over time, as younger generations feel less able to contribute to later-life financial milestones. To address this, the industry must find ways of better engaging younger investors and getting them to see the importance and benefits of investing for the longer term.

Breaking free of decision paralysis

UK savers should feel empowered to determine whether investing is right for them, and if it is, to take action to start investing with confidence. The biggest advantage of overcoming decision paralysis when it comes to investing is that the initial deposit has more time in the market to grow and compound, which means that the investor can reach their financial goals sooner than if they had delayed.

In addition, the Barclays research reveals that investing can also improve the investor’s self-confidence. One in three respondents (35 per cent) said they felt financially empowered after investing for the first time, and similar percentages said they felt ‘grown up’ (32 per cent), and ‘a sense of pride’ (30 per cent).

Sasha Wiggins, Chief Executive of Barclays Private Bank and Wealth Management, said: “For those with sufficient savings, the long-term benefits of investing are clear, but many people are still missing out. At Barclays, we are determined to make the decision to invest simpler and more accessible.  

“While investing is a personal choice based on individual circumstances, there is an estimated £430 billion sitting in the savings accounts of 13 million UK adults that we believe could be invested, unlocking growth on both an individual and macroeconomic level. The FCA’s Advice Guidance Boundary Review has the potential to bring about meaningful changes to help savers approach investing with more confidence.”   

Barclays reiterates calls for policy changes

Investing decision paralysis in the UK is exacerbated by current industry regulation, which limits how banks can support would-be investors as they take their first steps into investing.

Today, Barclays is reiterating its five public policy recommendations to help close the UK’s investment gap and empower more savers to engage with investing.

What needs to change

1. FCA badge to identify entry-level investment products that meet specific diversification/asset allocation criteria: To support new investors in identifying products that may suit their financial objectives, the FCA should develop a ‘badge’ for one or more entry-level investment product types that firms could use if their offering meets a specific set of diversification and asset allocation criteria suitable for that intended market of less experienced investors.
   
   
2. Simpler sign-up journey for entry-level investments: To make investing in one of these ‘badged’ products easier, the FCA should ensure a simpler sign-up journey for these products to reduce some of the current frictions in terms of declarations, risk warnings and product documentation for entry-level investors. 
   
   
3. Regulatory changes to enable firms to suggest investment actions to customers with large cash balances, based on “people like you” personas: Government and FCA should alter the regulatory framework for the provision of financial guidance. Regulated private sector firms should be able to suggest investment actions or products to any of their own customers who are identified as holding significantly more cash than would be expected for an emergency fund. This new regulatory framework should explicitly permit consumer-facing guidance based on generic personas such as “people like you would benefit from X”. 
   
   
4. Online tool and investment guidance from MaPS: The Money and Pensions Service (MaPS) should place a renewed focus on providing public-facing generic investment guidance through its MoneyHelper brand, to include an online tool that guides individuals to the broad set of financial investment products which they may wish to consider.
   
   
5. The development of comparison tables for entry-level investment products: Government should adopt an explicit policy aim to monitor and spur the development of easily accessible comparison tables for entry-level ‘badged’ financial investment products, so that consumers can make side-to-side comparisons through best-buy tables.

Clare Francis, Director of Savings and Investments at Barclays Smart Investor, said: "Choosing to invest should not be considered more difficult than life-altering decisions such as shaping your career or retiring. The industry has made significant strides to provide tools and education help people find a balance between saving and investing, but our findings demonstrate that more needs to be done.   

“We have to help people recognise the valuable role investing plays when it comes to growing their money and that it isn’t as complex and daunting as many perceive it to be.” 

- ENDS -

Notes to Editors

¹ Quantitative research

Unless otherwise stated, quantitative consumer research was conducted with a UK representative sample of 2,000 respondents by Savanta, commissioned by Barclays, in January 2025.

² Cash savings provide important liquidity. Barclays’ calculations are based on savers who already hold more than six months’ income in cash savings. Source: The UK investment gap: Estimated £430 billion in cash savings not invested by UK adults

³ Number of investors who waited over a year to start investing:

• In May 2022, 37 per cent of adults (19.5m) held any investment product, excluding investment property and other real investments – source: FCA Financial Lives 2022
• 8 per cent of this population equates to 1.56m investors who waited over a year to start investing

For more information, please contact Oliver Palca at oliver.palca@barclaycard.co.uk

About Barclays

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