Vanguard CEO: Investing should feel like an extension of saving, not gambling

Fear is the biggest obstacle preventing more Britons from investing, according to Salim Ramji, the Vanguard CEO.

Vanguard’s latest British Money Mindset Report, examines why millions of people continue to hold large amounts of cash despite the long-term benefits of investing.

Speaking at the launch event at the Spotify Headquarters in London, Ramji said the UK has developed a strong savings culture, but many people still see investing as something closer to gambling than a sensible way to build wealth.

“Our research shows Britons are excellent at saving,” he said. “But when it comes to investing, fear still prevents most people in this country from getting started.”

Britons underestimate the odds of investing success

• According to Vanguard’s research, four out of five people make a clear distinction between saving and investing.
• Cash is viewed as safe, but investing is often associated with unnecessary risk.
• When asked what the chances were that a £1,000 investment would be worth more after five years, most people estimated the odds at just 50%.

“In reality, the historical evidence suggests the odds are closer to 90%,” Ramji said.

This misconception has contributed to British households holding far more wealth in cash than many other developed markets, especially America.

Vanguard estimates that around 32% of UK household financial wealth is held in cash, roughly three times the proportion in the United States, while only 17% is invested, around one-third of the US level.

Cash can create a false sense of security

Ramji argued that although cash feels safe, inflation steadily erodes its purchasing power.

He pointed to the impact over the past two decades, quoting research that found £10,000 placed in a savings account 20 years ago would now have purchasing power equivalent to around £8,000 after inflation, despite earning interest.

By comparison, he said the same £10,000 invested in a broadly diversified equity fund would have grown to approximately £47,000 in real terms, after adjusting for inflation.

“Cash preserves an illusion of safety,” Ramji said. “What people are missing out on is the long-term compounding that helps build genuine financial security.”

Simplicity is the key to getting people invested

Ramji’s opening speech was that investing is perceived as unnecessarily complicated, but is in fact very easy.

He argued that simple, diversified investing is not only easier to understand but often delivers better long-term outcomes than more complex strategies.

“Most of the complexity in investing doesn’t serve any social purpose,” he said. “Much of it exists simply to justify higher fees.”

Making investing simpler, he argued, helps people feel more in control and reduces the anxiety that often prevents them from getting started.

You don’t need to be wealthy to invest

Ramji also challenged the perception that investing is only for affluent or financially sophisticated individuals.

Vanguard’s research found:

• More than 70% of investors said investing was easier than they expected once they got started.
• Three-quarters wished they had begun investing sooner.
• Nearly half made their first investment with less than £500.

“The first step really matters,” Ramji said, arguing that many people discover investing is far more accessible than they had imagined.

Younger generations are driving change

Despite the UK’s cautious investment culture, Ramji believes attitudes are beginning to shift.

Seven in ten people surveyed said they plan to invest within the next two years, with interest strongest among younger generations.

Vanguard says more than 1.5 million Britons have started investing for the first time over the past two years, with enthusiasm highest among Millennials and Gen Z investors.

Ramji said this momentum provides reasons for optimism, particularly at a time when concerns over the cost of living and long-term financial security remain high.

Building trust, not removing caution

Ramji concluded by stressing that people are right to be careful with their money.

Rather than encouraging unnecessary risk, he said the investment industry’s role is to build confidence through education, transparency and support.

“It’s about helping people understand that investing isn’t separate from saving, it’s an extension of it,” he said.

He added that trust comes from showing investors that risk can be understood and managed over time, and from ensuring people know they do not have to navigate investing alone.

The challenge isn’t convincing people that investing carries no risk, but helping them understand that not investing also carries a long-term risk that savers’ money will be worth less as it is eroded by inflation.