High-net-worth individuals are increasing their cash holdings, new research from Flagstone has found.
The research, carried out in partnership with Censuswide, shows that 38% of HNWIs hold more cash than they did three years ago, with cash accounting for an average 19% of their total wealth.
John Martin, chief product officer at Flagstone, said: “Cash is being used far more deliberately than it was even just a few years ago. It’s no longer seen as a temporary holding while investors wait on the sidelines and advisers are increasingly turning their attention to dynamic, deliberate and high-performance options for their clients’ cash allocations.”
The findings revealed that more than two fifths (42%) of HNWIs prefer to hold cash while waiting for the right investment opportunities, instead of committing capital to underperforming or risky assets.
When deciding where to hold cash, 76% of those surveyed said maximising interest rates is their top priority. Flagstone said the result is that cash is now commanding a greater share of adviser-client conversations as a deliberate component of wealth planning.
Martin said: “What we’re seeing is a clear change in mindset, among both advisers and clients. Cash has been elevated in HNWIs’ eyes as a credible alternative to investing when the risk-reward trade off elsewhere isn’t compelling. If clients want risk mitigation, capital protection and a guaranteed return, choosing cash is often the most rational decision.”
Similarly, 41% of SMEs have increased their cash reserves over the past three years to an average holding of nine months’ working capital in cash. This trend looks set to continue, with 34% of SMEs expecting to increase their cash reserves further in 2026.
Martin added: “What’s notable is that higher cash balances aren’t simply a defensive reaction. SMEs are holding cash to preserve flexibility so they can manage costs, withstand disruption and still act decisively when opportunities emerge.”
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