Retail investment in UK equities is the lowest among G7 nations and ‘streets behind’ the US, according to UK-based investment manager Abrdn, which is calling for action to address risk culture and boost capital markets.
The report has highlighted how UK adults hold only 8% of their wealth in equities and mutual funds outside of pensions — the lowest in the G7. Instead, 50% of British wealth is tied up in property and 15% in cash.
According to estimates, if UK adults allocated as much of their wealth to investments as US citizens (33%), it could inject up to £3.5 trillion into the capital markets over the long term.
“Around half of household wealth in the UK is in housing, reflecting a concentrated asset allocation compared to the US,” said Xavier Meyer, CEO Investments at Abrdn. Meyer emphasised the need for a national culture of long-term share ownership, supported by good regulation, products, and participation. “Getting the UK investing is a critical challenge for society, and we aim to be part of the solution,” he added.
Highlighting the cultural gap between the UK and the US, the data has shown that UK savers hold double the wealth in property compared to Americans (50% vs. 26%), while Americans hold nearly four times more of their wealth in investments (33% vs. 8%).
James McCann, deputy chief economist at Abrdn, noted that equity ownership is deeply ingrained in American culture, driven by factors like the financial-independence-retire-early movement and past educational campaigns such as the New York Stock Exchange’s ‘Own Your Share’ campaign that ran from 1954 to 1968 and. On the other hand, UK efforts, such as the 1986 “Tell Sid” campaign, have failed to create a sustained culture of share ownership.
Another Abrdn research has also pointed to “low risk tolerance” as a key barrier, with 55% of UK adults unwilling to take on the perceived risks of investing.
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Richard Wilson, CEO, interactive investor and COO, Abrdn, called for a “big bang” moment to spark change, with measures like scrapping stamp duty on shares. “The single biggest, and most simple, near-term boost would be to scrap stamp duty on UK shares. If stamp duty wasn’t a barrier to investing, why is it that we are losing systematically to the markets that don’t apply it? Sweden, for example, scrapped its financial transaction tax in 1991, and its capital markets have since flourished.”
Verona Kenny, chief distribution officer at Abrdn adviser, acknowledged that while automatic pension enrollment is not an active choice to invest, it serves as an important starting point for many. “If we want people to invest more broadly, we need to get them engaging with the topic and their financial future,” she said.
She highlighted Australia’s progress with the Quality of Advice review, which has taken steps to improve financial decision-making. Similarly, the UK’s Financial Conduct Authority is working on its Advice Guidance Boundary Review, aiming to introduce “targeted support,” enabling financial services companies to guide people toward better choices.
Abrdn’s report emphasises that boosting retail participation in UK capital markets requires collaboration across the financial industry, regulators, and policymakers to overcome cultural, educational, and structural barriers. The firm’s Savings Ladder campaign aims to inspire UK adults to climb a “savings and investing ladder,” “much like Britain’s engrained property ladder culture.”
