Britons have excess cash savings of £430 billion, research shows

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British savers have at least £430bn of excess cash in their savings, putting them at risk of missing out on potentially higher investment returns, according to a new report.

Research by Barclays suggests around 13 million adults could earn more by investing, saying regulatory changes are needed to encourage savers to put their money to work.

The bank said the figures were based on savers already holding more than six months of cash savings income, which underlined the “scale of opportunity” if more people invested.

Andrew Hagger, founder of consumer finance website MoneyComms, said: “For people sitting on piles of cash with a safety net of savings, investing some of that could help them achieve a more secure retirement good”.

The research comes as the Financial Conduct Authority finalizes plans to make it easier for companies to offer financial guidance – rather than full advice – as a way to help people invest. Providing advice can be cumbersome for firms as it requires additional regulations and costs.

The FCA said in last year’s consultation that one option was to allow companies to offer “targeted assistance” without upfront fees, so that firms could suggest products or courses of action based on a relevant target market for the consumer – rather than individual advice.

Another option is to allow “simplified advice” so that firms can advise people with smaller sums to invest and less complicated needs without it being economically unviable for the firm.

Barclays said a fifth of people who do not currently invest believe they have insufficient knowledge, according to its survey of more than 2,000 people. A quarter also thought investing was too complicated.

Policymakers are trying to encourage investment in UK stocks, which have suffered from a long period of outflows, as investors moved their money to global shares in search of higher returns.

Sasha Wiggins, chief executive at Barclays Private Bank and Wealth Management, said: “If this UK investment gap can be closed, we will be addressing two major untapped opportunities – one for the 13 million potential investors who could earn more returns good from their cash savings. long term; and the other for UK capital markets, which could see a boost if more savers invested.”

Tom Stevenson, chief investment officer at Fidelity International, said the UK stock market was trading “quite close” to “absolute bargain territory”. By comparison, he said U.S. stocks are “close to their recent highs.”

He added that falling interest rates and economic growth could contribute to “a further unlocking of the bearishness that has been applied to UK equities since the 2016 Brexit referendum”.

Wiggins said the key to unlocking the savings was “regulatory change”. Barclays made a number of recommendations, including asking the FCA to develop a “badge” for “entry-level” investments for less experienced investors.

It called on regulators to cut red tape – such as declarations, risk warnings and documentation – currently required for first-time investors to get started. Comparison tables showing how entry-level products compare to each other in terms of cost and performance would also help, they say.

Kitty Ussher, head of policy development at Barclays, said: “Our research suggests two big barriers to savers getting involved in investing: the difficulty of identifying the right investment product for their financial needs and the inability to elbow to elbow. product comparisons.”

The FCA said in a statement that it would soon set out the next steps. “Working with the government, the FCA wants to build an advice and guidance framework that consumers can trust, recognizing the complexity consumers face in making financial decisions,” it said.

“To achieve this, we need to create a system that provides consumers with the help they want, when they need it, and at a cost that’s affordable.”