Making financial decisions can be daunting, but for many UK savers, investing is among the most difficult. A new Barclays study reveals that nearly two in five people (38%) rank investing among the toughest life choices higher than career changes or major purchases.

Why Are People Afraid to Invest?

The study highlighted two major reasons why UK adults avoid investing: lack of knowledge (44%) and fear of losing money (41%). This hesitation often results in long delays, an estimated 1.5 million current UK investors waited more than a year before making their first investment.

However, for younger generations, the dream of homeownership takes priority over long-term investing. Nearly half (45%) of 18-34-year-olds say their primary financial goal is saving for a house deposit, compared to just 26% of the general population.

Meanwhile, only 26% of young adults prioritize retirement savings, compared to a national average of 42%. This trend raises concerns that the UK's "pension gap" may widen as younger generations delay or deprioritize retirement investing.

What Finally Pushes People to Invest?

Sasha Wiggins, CEO of Barclays Private Bank and Wealth Management, emphasizes the importance of reducing investment barriers: “Lack of clarity and practical advice is preventing savers from engaging with investing, leaving £430 billion of possible investments remaining in cash savings.”

“The industry needs to work with government and regulators to break down these barriers and help more savers invest. Key to this is regulatory change. A more balanced environment is needed, one that protects investors but also allows financial providers to deliver more targeted support, without crossing the boundary between guidance and advice.”

Many first-time investors make the leap due to influence from friends and family (26%), a specific financial goal (23%), or guidance from financial advisors (23%).

Others are prompted by a sudden lump sum, 20% of the respondents started investing after receiving an inheritance or a divorce settlement . These findings suggest that many people only invest when external factors force them to take action, rather than proactively planning their financial future.

Meanwhile, the FCA's Consumer Duty could have made London one of the hardest brokerage environments globally, according to a recent report by Finance Magnates. According to one broker, the FCA's consumer duty has caused a 25% rise in compliance costs in the first year.