Britons have the lowest appetite among their G7 peers for investing in the stock market, according to a new study that showed personal wealth in the UK was mostly tied up in housing, pensions and cash. UK savers invested just 8 per cent of their wealth directly into equities and mutual funds compared with 33 per cent in the US and an average of 14 per cent across the remaining five G7 nations, according to an analysis of national accounts by Abrdn.
The asset manager has repeatedly called on the government to encourage share ownership to help stave off what it sees as a crisis in retirement. There are “questions around how far can support an ageing population . . . and retirement pots will increasingly fall short of what people need”, said Xavier Meyer, chief executive of Abrdn’s investment business. “Personal savings and investments will need to increase to meet this shortfall,” said Meyer, who suggested that Britons could look to other G7 nations for inspiration. “Taking a few lessons from our international neighbours is no bad idea,” he added. In the US, a “risk-taking culture” and booming local stock market have driven personal wealth into equities, said Laith Khalaf, head of investment analysis at AJ Bell. The S&P 500 index of large, listed US companies has risen more than 1,100 per cent over the past 30 years, far surpassing similar indices in the G7. Over the same period, the UK’s FTSE 100 index has risen just 135 per cent. Khalaf added that in the US, a long-standing trend of “people managing their own pensions” using 401(k) plans had encouraged individuals to actively manage their money and invest in equities. The UK comes top of the pile for pension funds in Abrdn’s analysis: 19 per cent of personal wealth in the country is allocated to pensions, compared with 17 per cent in the US and 6 per cent in Germany, the lowest of the G