Investors have staged a historic retreat from UK-focused equity funds, pulling more than £10 billion from the market over the past six months in the deepest and most prolonged bout of outflows ever recorded.
Unprecedented Selling Amid Political Uncertainty
Fresh data from the global funds network Calastone shows the selloff intensified in November 2025, with UK-focused funds haemorrhaging almost £847 million. Analysts pinpoint protracted uncertainty surrounding government Budget policy as a primary driver for the investor exodus.
The UK was the hardest-hit region, followed closely by the United States, which saw £812 million withdrawn amid jitters over company valuations. Globally, a net £3 billion was pulled from equity funds during November, making it the second-worst month on record after October's £3.6 billion outflow.
A Stark Pattern of Withdrawals
The scale of the divestment is underscored by a striking statistic: only one month out of the last 55 has seen money flow into UK-focused funds. That solitary month of inflows followed Chancellor Rachel Reeves' first budget in 2024, when investors sold assets to crystallise gains ahead of an anticipated capital gains tax change, only to reinvest shortly after.
Edward Glyn, Head of Global Markets at Calastone, stated the political narrative has "played havoc with UK savers in recent months." He emphasised, "Never have we seen such consistent or large-scale selling before." Glyn linked the sudden pause in outflows after the Budget to investors selling holdings over fears of pension lump sum withdrawal curbs or further capital gains tax hikes.
Little Hope for a Year-End Rebound
The outlook for an immediate recovery appears bleak. Charles Hall, Head of Research at Peel Hunt, commented, "I think we'll continue to see the same trends that we've seen for some time… it would surprise me if there was much of a recovery [in December]."
Glyn warned that the period of policy uncertainty has clearly unsettled investors, potentially prompting reactive decisions they may regret. He concluded that savers benefit most from clarity and consistency for effective long-term financial planning.
