Pension warning issued as four in ten Brits have no idea how to invest for the future

Two in five Brits admit they have no idea where to start – when it comes to investing money, research has found.

A survey of 2,000 people found that one in three would class their knowledge about investments as “bad” – with almost half (45%) saying they don’t get involved in the world of investing. A common misconception is that investing is strictly for the super-rich – such as city bankers (38%), or older adults (21%).

And 49% admit they have been putting off making any investments by the idea that only the wealthy can do so – with 47% daunted by the prospect of getting started. However, nearly two-thirds (64%) say they would be more likely to spend their money in this way – if they were able to see exactly what it is going towards.

And 73% feel investment opportunities should be accessible to people from all income levels.

The research was commissioned by Nest pensions, whose chief investment officer, Liz Fernando, said: “Pensions are a great way to invest your money and watch it grow over time, in the background while you work.

“It’s evident that there’s a lot of work to do to demystify perceptions surrounding who can enter the world of investment – it really can be for everyone.” The research also found that the top three groups that Brits feel are most underrepresented when it comes to investing are the working classes (46%), young people (34%), and ethnic minorities (29%).

For nearly eight in ten (78%), the fear of losing money makes the idea of investment off-putting – while lack of investing knowledge (52%), uncertainty about the economy (51%), and not knowing where to begin (38%) are among other top fears. But 53% feel clear and transparent information about investment options would help ease their concerns – and nearly half (49%) of those polled, via OnePoll, feel they would most benefit from simpler investment platforms or tools.

And when it comes to pensions, profitability is sought-after for 58%, while investing in sustainable businesses is vital for 29%. It also emerged that 32% didn’t start taking any active interest in their pension until they were 36 or older.

More than four in ten (42%) are connected to their pension through an employment plan – while 15% contribute through a private plan.

Liz Fernando, for Nest pensions, added: “We know your pension pot can be one of the most valuable ways to help secure your future retirement, and it’s right you know where it’s being invested – especially when you’re saving into it for decades. We don’t know how the world of finance will look in years to come – but we do know your future self should be grateful that you are adding to your pot.”