Savvy the Squirrel Fronts National Drive to Boost UK Investment in Stocks and Shares
A major new marketing campaign, spearheaded by a character named Savvy the squirrel, is set to launch this week at the London Stock Exchange. Coordinated by the Investment Association, this initiative aims to foster a cultural shift in the UK, encouraging individuals to move beyond merely stashing cash and start investing in stocks and shares. With the UK having the lowest level of retail investment among G7 nations, the campaign seeks to raise awareness about the critical role investing plays in personal financial wellbeing and supporting the domestic economy.
Addressing the Investment Gap and Economic Impact
The campaign emerges against a backdrop where more than 29 million adults in the UK hold cash in low-interest accounts yielding around one percent, while stocks and shares have delivered an average return of approximately nine percent over the past decade. According to government data, equities have significantly outperformed cash savings in recent decades. The Investment Association's effort is designed to highlight this disparity and promote a more proactive approach to personal finance.
Investing in UK-based companies creates a virtuous cycle: it enhances company valuations, drives domestic economic growth, improves financial literacy, and elevates living standards. While the campaign does not explicitly urge consumers to buy British shares, it aligns with broader governmental objectives, such as the Chancellor's Leeds Reforms, which laid the groundwork for this initiative. Additional support comes from major investment platforms like Barclays, which are developing "Invest in Britain" hubs to facilitate access.
Encouraging Risk and Diversification Beyond the FTSE 100
A key component of the campaign involves reshaping attitudes toward risk. The Investment Association has reviewed investment risk warnings, advocating for contextualised and balanced messages rather than generic "capital at risk" tags, which the Financial Conduct Authority has found ineffective. This approach aims to provide a more nuanced understanding of investment opportunities and risks.
To attract UK savers, the campaign will emphasize the diverse range of stocks available, particularly beyond the FTSE 100. Most companies listed in London are small, with over half having a market capitalisation under £100 million. These firms span sectors such as fintech, biotech, defence, and media, offering innovation and growth potential. Notably, private investors hold about 24 percent of equity in the AIM market, more than double the London average, demonstrating existing engagement with smaller companies.
Geographic Spread and Policy Considerations for Future Growth
Smaller listed companies are geographically dispersed across the UK, with Herefordshire being the only English county without a headquarters of such a firm. This distribution helps connect savers with local investment opportunities, fostering community ties. To further channel capital into these enterprises, discussions are ongoing about mandating UK pensions to invest domestically and reforming the ISA regime to focus on UK companies, similar to France's PEA scheme for retail investors.
Historical context underscores the potential for gradual change. The "Own your share of American business" campaign in the US ran for 15 years from 1954, eventually doubling the percentage of share owners in the population. With a collective effort, this week's launch could mark the beginning of a similar investment journey in the UK, aiming to unlock an estimated £740 billion in additional economic inflow if households increase their investment in shares and funds from 15 to 25 percent of financial assets.
