Barclays has released new research highlighting the issue of decision paralysis among UK savers, which is delaying their entry into investing. According to the findings, nearly 1.5 million current investors in the UK took over a year to start investing, resulting in lost opportunities for financial growth.
The survey conducted by Barclays involved 2,000 UK investors and revealed that almost two in five (38%) consider deciding how to invest money as one of life's toughest decisions. This ranks it above career choices and major purchases but just below buying a house.
Key barriers preventing potential investors from taking action include a lack of knowledge (44%) and fear of losing money (41%). On average, it takes UK investors over three months to begin investing after considering it. However, for nearly one in ten (8%), this decision-making process extends beyond a year.
The study also examined motivations for investing. Influence from friends and family was the primary catalyst for 26% of respondents, while specific investment goals and financial advice motivated 23% each. Additionally, receiving a lump sum prompted one in five individuals to invest.
Younger adults face unique challenges due to the housing market's impact on their financial priorities. For those aged 18-34, saving for a housing deposit is more prevalent than building retirement funds, with 45% citing it as their initial goal compared to a national average of 26%.
Sasha Wiggins from Barclays stated: "For those with sufficient savings, the long-term benefits of investing are clear, but many people are still missing out." Barclays advocates for policy changes to make investing simpler and more accessible amid ongoing FCA proposals for an Advice Guidance Boundary Review.
Clare Francis at Barclays Smart Investor added: "Choosing to invest should not be considered more difficult than life-altering decisions such as shaping your career or retiring."
Barclays suggests several policy recommendations including creating an FCA badge for entry-level products and simplifying sign-up processes. They also call for regulatory changes allowing firms to suggest investment actions based on customer profiles.
These efforts aim to address decision paralysis by empowering savers with confidence and guidance necessary for making informed investment choices.