Fear of investing is costing UK savers thousands

The average stocks & shares ISA fund grew by 11.2% in the 12 months to February 2026, according to analysis from Moneyfactscompare, a consecutive year of positive returns and roughly three times the 3.5% average return from cash ISAs over the same period.

Yet the firm pointed to Aviva data showing more than half of UK consumers have no investments at all, with 39% considering investing too risky to try.

Rachel Springall, finance expert at Moneyfactscompare, said: "This should be a wake-up call for those who fear investing, as cash returns have diminished. If they get good guidance, savers can start small and slowly gain more knowledge to encourage them to increase their deposits."

The performance gap is not an anomaly. Stocks & shares ISAs have historically outpaced cash ISAs and, with the average cash ISA rate falling from 3.8% the previous year to 3.5% today, the direction of travel for cash savers looks unfavourable.

Sector performance over the past 12 months was broad, if uneven. Latin America was the standout, returning 38.2% – a dramatic reversal from its 11.1% loss the prior year. It was boosted by commodity prices, political shifts and currency strength. Commodities and natural resources also performed strongly at 28.8%, while UK All Companies returned 13.7%. Healthcare was the laggard, falling 4%.

Springall cautioned against reading too much into any single year's returns. “Past performance is not guaranteed to be repeated, so short-term gains should not be a decision maker in isolation,” she said, adding that investors should remain willing to review their fund choices and platform fees as their portfolios evolve.

The reluctance to invest also has a structural backdrop. From April 2027, the cash ISA allowance will be cut from £20,000 to £12,000 – with an exemption for savers aged 65 and over – as the government seeks to redirect capital into markets. The Retail Investment Campaign, expected to launch by April 2026 and backed by 19 financial firms, is designed to shift the cultural dial on investing.

Whether that campaign can overcome deeply ingrained caution remains to be seen. For now, millions of savers are leaving meaningful returns on the table – not because the numbers aren't there, but because confidence isn't.