Vanguard’s British Money Mindset Report: What The Experts Think

Younger investors are increasingly interested in investing because they feel they need to take greater control of their financial futures, according to a panel discussion at the launch of Vanguard’s British Money Mindset Report.

The panel was chaired by award-winning BBC journalist Katty Kay, alongside Steph McGovern, broadcaster and co-host of The Rest Is Money, Ben Summers, Vanguard’s Head of UK, and Laura Parsonage, Head of Client Brand & Insight. They discussed why Britain remains a nation of savers rather than investors, and what needs to change to help more people get started.

Gen Z investors want more control

Vanguard’s research found that around 780,000 Gen Z investors have started investing over the past two years, with more than 90% saying they intend to invest in the next two years.

Ben Summers said younger people understand that the cost of living, inflation and uncertainty around retirement mean they may need to do more themselves.

“It’s almost like a call to action,” he said.

One first-time Vanguard investor, Calvin Kerr, said investing helped him feel more in control after moving to London, seeing his savings disappear and falling into debt.

“If everything around us is uncertain, then at least I can do something for myself to be a bit more certain,” he said.

Britain still has a savings culture

Laura Parsonage said one of the biggest barriers is that saving feels familiar and safe, while investing feels uncertain.

“We’ve grown up putting pennies into piggy banks and talking about saving for a rainy day,” she said.

Her view was that investing needs to be reframed as an extension of existing savings habits, rather than something completely separate.

That means encouraging people to start small, invest regularly and learn as they go.

Risk warnings may be putting people off

Steph McGovern said many people misunderstand investment risk because warnings make it sound as if investors could lose everything.

“We think of money being at risk as ‘I’m going to lose it all’,” she said.

She argued that savers are not given the same warning about the risk of inflation eroding cash savings.

Summers said Vanguard has been testing more balanced risk warnings that explain both investment risk and the risk of holding too much cash. He said adding more context and balance to risk language had led to a 25% uplift in conversion rates.

Language is still too complicated

The panel also agreed that the investment industry makes investing sound harder than it needs to be.

Summers said simply changing investment language into plain English can make a major difference, increasing intention to invest by 33% among men and 44% among women.

He said even Vanguard’s relatively small range of around 75 funds and ETFs can still be too much choice for new investors, which is why guided and managed services are growing quickly.

Vanguard said testing showed investors reacted badly to terms such as “adventurous” and “cautious”, which can feel emotional or unclear. The firm now prefers descriptions such as “growth leaning” and “stability leaning”, which users found easier to understand.

Women are starting to close the investing gap

The panel also discussed the gender investing gap.

Parsonage said 13% of women have started investing in the past two years, compared with 10% of men, suggesting progress is being made.

McGovern added that women are often strong long-term investors once they get started because they are less likely to constantly trade in and out of the market.

The challenge, the panel agreed, is making investing feel easier, more familiar and less like gambling.

Asked about women and investing, the panel said the industry needs to make investing easier, more engaging and more familiar. McGovern said women are often strong investors once they begin, while Parsonage said investing should be positioned as part of household budgeting and regular saving.

Crypto shows the need for better guidance

Summers said Vanguard is encouraged by younger people’s interest in investing, but less comfortable with the number starting through crypto.

He said crypto may appeal because of gamification, social media and the “hustle” culture among younger generations, but long-term goals such as retirement or saving for children should be approached differently.

On crypto, Summers said Gen Z’s engagement with markets is positive, but Vanguard would rather see long-term goals approached through diversified funds and regular investing than speculative assets.

For Vanguard, that means diversified funds, regular investing and staying focused on long-term outcomes.

AI could put guidance in everyone’s pocket

Looking ahead, Summers said technology and AI could transform access to financial guidance.

He said the UK’s advice gap means millions of people could benefit from some form of help, but traditional regulated advice is too expensive for many.

Targeted support, simplified advice and AI-enabled guidance could allow firms to deliver more personalised help at scale.

“That leads to a world where everybody has some form of guidance, or even a little adviser in their pocket,” he said.

The conclusion from the panel was clear: Britain does not lack interest in investing. It lacks confidence, simple language and trusted guidance to help people take the first step.

ISA reforms

During the Q&A, Good Money Guide asked the panel whether proposed ISA reforms go far enough to encourage people to invest rather than save, particularly given the role that interest on platform cash has played in bringing savers onto investment platforms.

Ben Summers said Vanguard would support anything that helps people move from saving to investing “in the right kind of way”, but warned that reforms must not undermine one of the ISA’s biggest strengths: simplicity.

“The beauty of the ISA as a tax vehicle is its simplicity,” he said, adding that any changes need to preserve clarity for everyday investors.

Steph McGovern added that ISA reform alone would not solve the UK’s investment gap. She said getting more people to invest, particularly in UK companies, will require a broader mix of education, better explanations of risk and improved financial literacy.

The panel was also asked why more Gen Z investors are getting started. Summers said younger people appear to be responding to cost-of-living pressures, market uncertainty and concerns that their financial future may be less secure than previous generations. Calvin Kerr added that many young people feel a growing need to take control of their own future.