𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The City and the government got a boost on Thursday when fresh figures showed a flood of new investors entering the stock market.

Both City firms and chancellor Rachel Reeves are keen to get more involvement from “retail” share pickers, to aid the flotation of new companies and improve long-term family wealth.

With the end of the tax year, and the ISA deadline of April 5, fast approaching, consumers are being urged to make use of their tax free allowances.

Data from Boring Money shows that one in three Britons now invests in the market – 18.4m people. That is up from one in four back in 2020.

There was a rush of new people with time on their hands and money saved who tried share investing for the first time during Covid lockdowns.

Among new investors, Trading 212 now accounts for 42 per cent of new accounts. The findings come as the UK government looks to encourage more people to invest as part of a broader push to improve long-term financial well being and support economic growth

Holly Mackay, CEO of Boring Money, says: “Investing is becoming more mainstream. British adults now manage over 13 million DIY investing accounts and have more choice than ever. Competition is hotting up. Pricing isn’t the only element of value, but it’s an important one and we expect pricing pressure to increase.”

While the early post-pandemic boom was driven largely by younger investors (25-34 year olds), the fastest growth over the past year has been among 35–44 year-olds, with participation in this group rising by 7%. The average age of a DIY investor has also fallen, from 55 five years ago to 49 today.

Trading212 is the most popular platform for new investors, followed by Monzo and Aviva. The established players in the market are Hargreaves Lansdown, AJ Bell and Interactive Investor.

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They are all chasing new clients, particularly those in their late 30s and early 40s who tend to have the fastest wage growth and be looking towards the future.

Some firms are offering cash back incentives. Barclays is offering £600 cashback on cash ISAs – but you have to have £100,000 to invest in order to qualify. IG is also offering up to £200 when you open a share account.

Others such as Hargreaves Lansdown have been cutting their fees for both ISAs and self-invested personal pensions (SIPPs).

HSBC, Zopa and Lloyds Bank are all offering cashback incentives to transfer or open a new ISA account, while Tesco, Nationwide and Trading 212 all have either new products or have raised the interest rates offered on their cash ISAs.

Rates of up to 4.6 per cent can be found for those willing to scour the market.

But it is into shares that the government is most keen to persuade savers to go.

In a speech last July the chancellor said: “For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits.”

She has asked ad-agency WPP to work on “Tell Sid” style advertising campaign aimed at boosting stock investing. Launching in April, it will be led and funded by banks and investment platforms.

Tell Sid was the government backed campaign to get small investors to buy shares in British Gas as it joined the stock market back in 1986.

Tom Selby, director of public policy at AJ Bell, said: “Any upward trajectory for retail investing among Brits is hugely positive for the nation’s long-term finances. It will also likely be music to the ears of Rachel Reeves as she looks to kickstart the government’s campaign to boost retail investment and shift the current culture of saving in cash towards investments.

“But there is still a huge amount that can be done to help more people embrace investing for their futures. Reforms should prioritise simplicity, particularly in the ISA market, with confusing jargon and large numbers of products acting as a barrier to many who might be looking to take that step from cash to investing for the first time.”