Nearly a third of the highest earning households are failing to invest, new research from Hargreaves Lansdown has revealed.
According to the Hargreaves Lansdown Savings and Resilience Barometer, the highest earning 20% of households, equating to 3.2 million households, are most likely to be able to invest but 31% do not currently do so.
Overall, 8.8 million households are in a position to invest but 42% of them do not.
However, the investment platform said 28% of households are not in a financial position to invest but do so anyway.
Richard Flint, interim CEO of Hargreaves Lansdown, said the findings highlight both the “scale of opportunity and challenges” the nation faces when it comes to savings and investment.
He said: “We see a growing retail investment culture in Britain, with investor numbers up, and innovative changes from the Government and regulators should see this flourish even further in the coming year. Financial resilience has also improved and readiness for retirement is now well above pre-pandemic levels.
“However, the data shows there remains much more to do. Almost four million British households have the resources to invest but are not currently doing so, missing out on the opportunity to grow their wealth and take control of their financial futures.”
The firm said the failure of higher earning households to invest is driven not by financial reasons but due to a lack of confidence and knowledge, with people often not knowing enough about investment and harbouring inflated fears about risk.
Sarah Coles, head of personal finance at Hargreaves Lansdown, commented: “It’s why changes to the advice/guidance boundary will be transformational. It will give people the understanding and confidence to realise the right balance of savings and investments for their needs and take advantage of the huge potential that investment offers.”
The data also revealed a significant gender investment gap, with only 28% of single women choosing to invest compared to 39% of single men. A similar picture emerges among those in relationships, with 32% of women in couples investing versus 38% of men. Hargreaves Lansdown said that among its own clients, 39% are female compared to 61% male.
Couples are more likely to invest as they get older, with less than half (43%) of 20-40 year olds investing, versus 58% of those over 50. However, the same isn’t true for singles, who are less likely to invest at any age.
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