A reluctance to invest means millions of savers are missing out on potential long-term growth, says Scottish Friendly.
As part of its latest Family Finance Tracker, the mutual warned Brits are parking money in cash and delaying a move into investments, even when inflation can erode the value of cash over time.
While 77% of people have a savings account, fewer than half (46%) hold a cash or stocks and shares ISA.
Scottish Friendly said more than half (57%) have not opened or started using any savings or investment products in the last three months and of that group, the same number (57%) do not hold an ISA of any kind.
Hesitation to invest is greatest among women and individuals in Scotland, where 60% and 59% respectively have not opened a product in the past three months, compared with 53% of men.
Among those who did open an ISA, cash continues to take the lead. Across the UK, 10% opened or started using a cash ISA in the past three months, compared to just 7% who opted for stocks and shares ISA.
Those who did choose to open or start using products said they were prompted by growing awareness of the importance of saving, cited by 29% of respondents across the UK. External pressures such as the cost-of-living crisis and energy price gap also drove 26% of people to engage with a financial product.
Kevin Brown, savings expert at Scottish Friendly, said: “Some hesitation around money is understandable given the uncertain economic outlook over recent times and the speed at which the picture seems to be changing week-to-week.
“In that context, it’s great that saving remains a priority, showing people are thinking carefully about their finances. It seems that many believe sticking to cash is the safe and sensible option.
“While not guaranteed, over the long term, investments have historically provided returns that may outpace inflation. Our Family Finance Tracker shows that there is a reluctance to invest and this ‘hesi‑saving’ may be quietly holding people back from potential growth over time.
“As inflation eats away at purchasing power, money sitting in cash could lose value in real terms. Starting early, with regular sums, can compound over time into meaningful returns.”
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