We all know someone who prefers to keep their cash safely tucked away in a bank account rather than risk it in the stock market.
But new research shows that this cautious approach might actually be doing more harm than good—especially for those who can afford to take a few financial risks.
The Big Picture: Too Much Cash, Not Enough Growth
According to data from Interactive Investor, more than half of UK adults—around 31.4 million people—are holding back from investing because they’re scared of short-term losses.
That makes sense on an emotional level. No one likes to see their money shrink, even temporarily.
But here’s the kicker: around a third of those people are actually financially stable enough to weather those dips.
They just don’t feel emotionally equipped to handle the ups and downs.
This reluctance leads to a troubling trend: under-investment.
In fact, 71% of the 3,000 people surveyed said they have no investments outside of their pensions at all.
Fear Is Winning Over Logic—And That’s a Problem
Richard Wilson, CEO of Interactive Investor, summed it up like this: “Millions of people have the financial capacity to invest, but don’t believe it’s worth the risk.”
Over a lifetime, that fear can seriously dent someone’s financial future.
Britain actually has the lowest levels of stock ownership (outside of pensions) in the entire G7.
Instead, the nation leans heavily on property and cash—which might feel safe, but often yields lower long-term returns.
The Emotional Barrier Is Real—and Common
Only 12% of people described themselves as having a high emotional capacity for risk.
A slightly larger 19% had high risk tolerance overall, meaning they’re open to taking some losses now for gains later.
But most people—57%—just aren’t wired that way.
Greg Davies, who heads behavioural finance at Oxford Risk, put it bluntly: “Most people invest too little and take less risk than they could safely afford.
This isn’t about logic—it’s about emotion.”
Interestingly, it’s often the people in the strongest financial positions who are most emotionally hesitant.
They could aim higher, but their discomfort with market fluctuations holds them back.
Billions Sitting Idle in Bank Accounts
If you want numbers to put this all into perspective, consider this: as of May, Brits had a staggering £280 billion sitting in bank accounts earning zero interest.
With inflation doing its thing, that money is quietly losing value every day.
Even those with high-interest savings accounts or Cash ISAs aren’t in the clear—because in most cases, inflation is still outpacing those interest rates.
The Government Is Stepping In—but Will It Work?
In response, Chancellor Rachel Reeves has kicked off a campaign encouraging everyday people to embrace investing.
Starting next year, the government will roll out “targeted support” reforms.
These aim to give tailored advice based on what others in similar financial situations are doing with their money.
There were fears that Reeves might scrap the Cash ISA altogether to push people toward investing—but for now, that option is safe.
Still, the hesitation lingers.
Most Savers Say “I Would If I Could”
Interestingly, most people aren’t opposed to the idea of investing. They just feel held back.
In the survey, 41% said they’d invest if they had more money, and 16% said they’d do it if they better understood how investments work.
Only 3% said they’d be more willing to invest if the tax benefits of Cash ISAs were taken away.
So, it’s not just fear—it’s also confusion and a lack of confidence.
Experts Say It’s Time to Rethink Our Attitude
Craig Rickman, personal finance expert at Interactive Investor, says this issue isn’t just about money—it’s about mindset.
“While people should only take on as much risk as is right for them, short-term emotional barriers often mean we don’t take the risk that’s right for our long-term needs,” he said. “We urgently need radical action to address this—or risk more people scraping by in retirement.”
The Bottom Line
It’s totally understandable to feel nervous about investing, especially with money you’ve worked hard to save.
But experts are urging Brits to rethink their relationship with risk. Because playing it safe with your cash might actually be the riskiest move of all.