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.
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 £500 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.
