Many adults are now starting to prioritise savings over stocks and shares

Research involving 2,000 adults across the UK found only 26 per cent chose to put their money into something other than a regular savings account or a cash ISA last year, down six per cent on 2022 figures.

More than a third (36 per cent) said they simply couldn’t afford to invest and 22 per cent decided to prioritise savings because of the high interest rates they could get.

Nearly two in 10 (19 per cent) admitted they are not confident they know how to invest, while 26 per cent decided against it because they are worried they might lose their money.

However, among those who did invest last year, 40 per cent reported feeling more confident investing last year than ever before.

And 36 per cent of these started investing for the first time last year.

Brian Byrnes, head of personal finance at saving and investing app Moneybox, which commissioned the study, said: “The research shows many people chose to prioritise savings over investments in the last year, perhaps understandably, enticed by the highest cash interest rates in over a decade. Undoubtedly for some, this may have been a sensible, considered decision, but many may be surprised to learn that only investing, rather than cash savings, would have kept pace with inflation throughout 2023.

"If you already have a rainy day fund set aside, and you're looking to the long term, investing is one of the best ways to grow your money over time. Saving and investing should both be viewed as essential components of a financial plan that will help you achieve your short and longer-term financial goals.”

Of those who chose to invest over the last 12 months, the most common motivation was to build wealth for the future (50 per cent), and 36 per cent are investing toward a more comfortable retirement.

Impact of cost-of-living crisis and long-term financial goals

Nearly three in 10 (29 per cent) invest to help them achieve their long-term financial goals as quickly as possible, while 27 per cent want to grow their money to help provide for their family in the future.

The research, which was conducted via OnePoll, also looked at the impact the cost-of-living crisis has had - and 34 per cent said it has made them think about how they can become more financially resilient.

Looking at financial plans for the year ahead, 31 per cent are prioritising building up their rainy-day fund, while 12 per cent are set on establishing clear financial goals and putting plans in place to achieve them. Another 12 per cent want to kickstart their investing journey in 2024.

Brian Byrnes, from Moneybox, added: “For far too long, investing was seen to be inaccessible and confusing and many people struggled to know how to even get started. Thankfully this is changing and it's great to see that people are becoming more confident investors over time. Because the truth is, becoming financially resilient is about so much more than building a rainy day fund, although that is a very important part of it. It requires a longer-term approach toward how we manage our money and plan our finances for the future. Building wealth throughout life is how you become financially resilient and historically investing is proven to be the most reliable way to grow your money over time.”