Savings will remain indispensable in nation of investors, independent report finds

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  • A new independent report commissioned by Leeds Building Society based on nationally representative research1 shows that savings will play a fundamental role within a nation of investors.
  • The findings are from the London Foundation for Banking & Finance’s report which explores consumer attitudes and understanding of savings and investments.
  • The results show that although some consumers may be undervaluing how investing could serve long term financial aims, a third of respondents with “some” or “significant” savings are put off investing by global instability, and the simplicity and accessibility of cash savings remain popular.
  • There is a gap between confidence and capability with 59% of consumers saying they feel confident managing their money but only 26% correctly answered financial capability questions.
  • Consumers are potentially exposing themselves to too much or too little risk with 22% saying investments were suitable for emergency funds while 23% identified cash savings for long term goals.

New research shows the importance of savings habits in achieving a shift within UK consumers towards a more investment-oriented mindset, as the UK prepares to roll out new ‘targeted support’ rules.

It finds savings will play an ‘indispensable role’ in supporting an emerging nation of investors but also reveals significant confusion around when to save and when to invest.

The report highlights that cash savings remain popular not only because they provide security, but because of features like their accessibility, predictable returns and simplicity make them a popular choice.

About the report

‘A Nation of Investors: The Indispensable Role of Savings’ is an independent report by the London Foundation for Banking & Finance, commissioned by Leeds Building Society, which explores the broader savings and investment landscape and the intention of building a nation of investors in the UK.

It shows that many consumers misjudge the level of risk involved in different products, with some viewing investments as suitable for emergency funds or short term goals, while others see cash savings as appropriate for long term objectives.

These gaps in understanding underscore the importance of building financial capability and confidence alongside greater promotion and access of investment opportunities.

Why we commissioned the report

From 6 April 2026, changes to regulation will usher in ‘targeted support’, a new form of financial help that aims to sit between general guidance and full financial advice. Targeted support will allow authorised firms to give suggestions to consumers with similar characteristics, without giving full advice which can be costly for many consumers.

The changes are being introduced alongside a widescale promotional campaign funded by retail investment firms aimed at increasing the take up of investments.

Leeds Building Society has more than 750,000 savings members and advocated last year to protect cash ISA allowances after its members voiced their concerns over the impact of proposed changes.

What the report shows

The research indicates that gaps in understanding can influence when people choose to save versus when they might consider other options for long-term goals.

While 59% of people say they feel confident managing their money, only 26% were able to answer the report’s financial capability questions2 correctly. Strikingly, almost half (46%) of those with low capability scores still believe they make decisions confidently.

Other findings from the report:

  • Consumers are potentially exposing themselves to too much or too little risk, with widespread misunderstanding of the differences between saving and investing: 22% said investments were suitable for emergency funds and 31% for short or medium-term goals, while 23% identified cash savings for long term goals.
  • Only just over half (51%) of consumers with more than £10,000 to invest described their savings as “significant”, emphasising the need for financial choices to be based on individual circumstances not illustrative thresholds.
  • In an uncertain world, a third of consumers with “some” or “significant” savings are put off investing by global instability, and high-profile political figures such as Vladimir Putin (net 30% unfavourable) and Donald Trump (net 26% unfavourable) make them less likely to invest.
  • Consumer preferences are strongly influenced by the purpose of their savings, with many saying they are drawn to cash savings for their accessibility (49%), predictable returns (46%) and simplicity (45%).
  • There were major gaps in understanding of concepts which are key to good financial security: 45% of respondents did not know that buying a single company’s stock is riskier than a diversified fund and 47% of respondents did not understand that money loses value when inflation outpaces interest rates.
  • Consumers are generally open to receiving financial recommendations based on “people like me” (48%) but large numbers were neutral on topics around segmentation and how well financial providers knew them, suggesting these are areas of focus for providers of targeted support.
  • The need for trustworthy information from regulated financial guidance channels is high: 61% of respondents said they distrust social media and 48% are put off investing by the fear of scams.

What the findings tell us

As the drive towards building a nation of investors gathers pace, the report’s findings highlight the risk of overlooking the enduring importance and popularity of savings, which can provide the security that many people need before they can consider investing.

It says if targeted support relies on a consumers’ self-reported readiness, then it alone may not close the gap between savings and investing.

The report goes on to say that the success of targeted support should be measured not just by if money moves into the investment market, but by how well it corrects misallocations of money based on the goals seeking to be achieved.

It argues that regulated providers cannot simply "sell growth", they must proactively "sell safety" through education, clear warnings and anti-fraud initiatives.

What actions are needed

The London Foundation for Banking & Finance and Leeds Building Society want consumers and investment institutions to make use of the research and highlighted three key areas where industry can act:

  • Close the confidence-capability gap: Appreciate the mismatch between consumers’ self-reported confidence and demonstrated capability in how firms fulfil their Consumer Duty responsibilities while promoting investment opportunities and providing targeted support.
  • Avoid one-size-fits-all thinking: Ensure ‘investable asset’ reference points, such as having £10,000 or six months’ earnings in savings, do not determine recommendations and that consumers are sufficiently helped to make decisions based on their own circumstances.
  • Align recommendations with consumer goals: Acknowledge that targeted support recommendations should be based on consumers’ own financial goals and that cash savings have an important role beyond emergency funds and providing financial resilience.

Andy Moody, Chief Commercial Officer at Leeds Building Society, said:

“Cash savings are the backbone of achieving good financial outcomes and they remain extremely popular. This research shows why cash ISAs and cash savings in general must play a central part in any shift towards building a nation of investors in the UK.

“Savings need to exist alongside greater investing to help people maintain financial resilience, achieve their money goals and withstand the volatility of the markets. We must ensure the role of cash savings within the mix of financial opportunities is treated fairly and we build people’s financial capability to manage the risks and opportunities properly.”

Harry Weber, Director of Partnerships at the London Foundation for Banking & Finance, said:

“We warmly welcome the opportunity to work with Leeds Building Society and commend their initiative in commissioning research into such an important and topical issue. At the LFBF, we are committed to building financial capability in the UK population.

We believe the FCA's targeted support regime has an important part to play in helping UK consumers to make better financial decisions, but only if the appropriate guard rails are put in place by financial services firms themselves. We hope these new findings will make a meaningful contribution to the industry's understanding of actual levels of consumer confidence and capability, and how best to respond to those in order to create greater financial understanding and inclusion.”

Keyur Patel, Research Associate at the London Foundation of Banking and Finance, said:

“Our research suggests that the goal of targeted support should ultimately be alignment. If the new regime helps a consumer move from stagnant cash into productive investments that match their goals and risk tolerance, it will have succeeded. Equally, if a consumer chooses to remain in cash because it provides the essential liquidity and peace of mind they require, the system has also functioned correctly. The measure of a functioning regime is its ability to ensure that every individual is matched with a level of risk they both understand and withstand.”


1A nationally representative survey of 1,000 UK adults was conducted on behalf of the London Foundation for Banking and Finance by Leeds Building Society via Purespectrum in February 2026. Quotas were set for age and region to ensure the sample mirrors the UK population. The quota based sampling and nationally representative design ensure findings accurately reflect the views of the wider UK population.

2The financial capability questions were adapted from three questions created by academics from the Global Financial Literacy Center. More information about the questions can be found at https://gflec.org/wp-content/uploads/2015/04/3-Questions-Article2.pdf.