Something changed in British financial life after March 2020. With offices closed, commutes cancelled, and discretionary spending stripped back to almost nothing, a portion of the population found itself with more savings and, crucially, more time to think about what to do with them. Platform operators reported surges in new account openings. Financial apps climbed the App Store charts alongside video calls and grocery delivery services. Commentary across the financial press spoke of a democratisation of investing — a new generation finally engaging with markets that had, for too long, been the preserve of those who could afford professional advice.

The story was compelling. It was also, in several important respects, incomplete. Five years on, the data from the Financial Conduct Authority, the Office for National Statistics, and the platforms themselves paints a picture that is more nuanced than either the optimists or the sceptics have allowed. Participation genuinely did increase. But the profile of who participated, what they bought, and how they have fared since tells us something quite specific — and quite different — about the state of retail investing in the United Kingdom today.

A Nation of Savers, Reluctantly Becoming Investors

To understand what happened in 2020, it helps to understand what was already there. British households have historically been cautious with their financial assets. According to research cited by the FCA in its policy statement on targeted support, in the three years to 2023, UK households allocated on average just 19% of their household financial assets to retail investments — meaning funds, shares, bonds, and similar instruments. The equivalent figure was 38% in the European Union and 56% in the United States. That gap is not simply cultural. It reflects decades of policy, regulation, and entrenched habit that have made cash the default choice for British savers at almost every income level.

The pandemic disrupted that equilibrium, at least temporarily. According to ONS analysis of sector accounts, the household savings ratio — household savings as a proportion of disposable income — surged from 8.9% in the first quarter of 2020 to a record high of 25.9% in the second quarter, as lockdown restrictions collapsed spending on restaurants, travel, leisure, and retail. By the ONS’s own modelling, roughly three quarters of this increase was what economists call forced saving: people who wanted to spend and could not. The remaining quarter reflected deliberate precautionary and investment-oriented saving. Across the whole pandemic period from the first quarter of 2020 to the fourth quarter of 2021, ONS estimated total accumulated excess saving at approximately £170 billion. Most of it sat, at least initially, in cash and deposits.

That mountain of accumulated cash created a pool of potential capital. Some of it found its way into investment accounts. The question of how much, and with what results, is precisely where the data becomes interesting.

Who Opened an Account — And Who Actually Invested

The FCA’s Financial Lives survey, which has tracked consumer attitudes and product holdings since 2017, provides the most reliable longitudinal view of retail participation in the UK. Its 2024 wave, based on fieldwork conducted between February and June 2024, found that approximately 35% of UK adults held investments of some kind — excluding those who held only property — representing around 19 million people. That was down slightly from 37% in the 2022 survey, suggesting that the post-pandemic period has been one of modest consolidation rather than continued expansion. But the direction of travel over the broader period since 2017 has been upward, and the composition of investors has changed materially.

Twenty-one per cent of current investors began investing in the last three years, according to FCA data — a cohort that is demonstrably younger, more likely to use social media for investment research, and more likely to hold higher-risk products than established investors. The gender gap remains wide: men are 54% more likely to hold investments than women, with participation rates of 43% against 28% respectively. The FCA has acknowledged this gap as a persistent structural issue rather than one that is closing at pace.

Platform data adds further colour. Hargreaves Lansdown, the UK’s largest retail investment platform by assets, had approximately 1.7 million customers as of its most recent reporting — a figure built over more than four decades since its founding in 1981. AJ Bell, the second-largest listed platform, closed its financial year to September 2024 with 542,000 customers across its advised and direct-to-consumer channels, up 14% in the year, with assets under administration reaching a record £86.5 billion. These are the incumbents: substantial, established, and predominantly serving customers who think in terms of years and decades rather than weeks.

Then there is Trading 212. The Bulgarian-founded, London-headquartered broker has built a global user base of 4.5 million funded accounts, with its UK entity generating revenue of £161.7 million in 2024 — up 55% on the prior year — and monthly active users more than doubling across the same period. In 2024, funded investment accounts grew 72% year-on-year. Its model is different from Hargreaves Lansdown and AJ Bell in a fundamental respect: zero-commission trading on stocks and ETFs, no custody charges, and an interface built explicitly for a mobile-first audience. The platform temporarily closed to new registrations during the GameStop frenzy of January 2021, unable to process the volume of incoming applications quickly enough. That single episode is, in miniature, a portrait of the moment.

What these three platforms illustrate is not a single retail market, but several overlapping ones. The customer who holds a Hargreaves Lansdown SIPP and an ISA invested in a diversified fund portfolio is, in behavioural and financial terms, a very different participant from the Trading 212 user who opened an account during a period of market volatility and holds a concentration of US technology stocks on a smartphone. Both are described as ‘retail investors’. The aggregated statistics treat them as the same cohort. They are not.

The Savings Gap and the Cash Trap

If the growth in platform participation is one side of the story, the persistence of cash as the dominant asset class for UK savers is the other. The FCA’s 2024 Financial Lives data found that 61% of people with more than £10,000 in investible assets held at least three-quarters of those assets in cash rather than investments. This is not a fringe finding. It describes the majority of people with meaningful savings balances. The FCA has cited this pattern repeatedly as one of the central consumer investment problems it is trying to address: the mismatch between a stated willingness to invest and an actual behaviour of holding cash.

The reasons for this are not straightforward. They include genuine risk aversion, a lack of confidence in one’s ability to navigate investment products, distrust of financial services following a series of high-profile scandals and collapses, and the practical absence of affordable personalised guidance for most retail savers. The FCA’s long-running Advice Guidance Boundary Review has spent several years examining precisely this problem — the gap between the formal regulated advice that most people cannot access or afford, and the generic information that most platforms are permitted to provide. As of 2024, only 8% of UK adults received formal financial advice in any given year.

The ONS’s post-pandemic savings analysis adds another dimension. The £170 billion in excess savings accumulated between 2020 and 2021 was not evenly distributed. Higher-income households, whose spending was curtailed more significantly by restrictions on leisure and hospitality, accumulated the bulk of this surplus. Lower-income households — more likely to work in sectors that remained open, more likely to face insecure employment, more likely to be renting — were less likely to have seen savings build up and more likely to have run them down. The pandemic saving story, in other words, was always a story about a particular subset of the population.

What New Investors Actually Bought — and What That Tells Us

The composition of the new investor cohort, and the products they gravitated towards, matters considerably for any assessment of outcomes. FCA data from its consumer investments strategy work highlighted a clear generational skew in high-risk product holding: younger investors — those under 34 — accounted for 44% of cryptocurrency holdings and 31% of crowdfunding investments among surveyed retail investors. Nearly three-fifths of those who had invested in high-risk products acknowledged that a significant loss would have a fundamental impact on their current or future lifestyle. That is a material mismatch between the risk profile of the product and the financial resilience of the holder.

Contracts for Difference, or CFDs, represent perhaps the most documented example of this mismatch. The FCA has consistently noted that approximately 80% of CFD customers lose money — a figure drawn from mandatory disclosure requirements placed on CFD providers. Despite this, the CFD market has grown, partly because the products are aggressively marketed and partly because the potential for outsized short-term gains attracts exactly the demographic — younger, less experienced, seeking supplemental income — that is least equipped to absorb the downside.

The broader picture, though, is less uniformly gloomy. The new investor cohort is not, in aggregate, composed entirely of people gambling household income on leveraged derivatives. The FCA’s platforms data from 2024 found that the majority of non-advised platform users held shares, funds, and ETFs — mainstream products with understandable risk profiles and no leverage. Trading 212 itself, despite its origins as a CFD provider, has explicitly stated that its growth strategy is now focused on its commission-free stockbroking platform rather than its CFD business. The shift in that company’s stated direction reflects a broader maturation in what the new retail participant base actually wants from their platform.

What the data does not straightforwardly support is the claim — common in press coverage during 2020 and 2021 — that the pandemic created a durable army of sophisticated retail investors who had discovered the long-term wealth-building potential of equity markets. It created something more diverse than that, and considerably more uneven. Some new investors did indeed open index-tracking ISAs and begin systematic monthly contributions. Others opened CFD accounts or bought concentrated positions in meme stocks on the back of social media recommendation. Both groups are captured in the participation statistics. Neither tells the full story alone.

Putting the Numbers to Work

For anyone trying to navigate this landscape as a trader or investor, the aggregate statistics are a starting point rather than a guide to action. What they tell us, collectively, is that the UK retail investment market has meaningfully expanded, that the new entrants to it are younger and more digitally-oriented than the established participant base, that the dominant position of cash as the default asset is proving deeply persistent, and that the FCA is attempting — with mixed results — to reshape how products are promoted to retail consumers.

Understanding where you sit within this landscape is more useful than tracking the aggregate trend. The structural questions that matter for an individual are: what is the proportion of investible assets held in cash versus deployed in the market, and is that allocation intentional or the result of inertia? What products am I actually holding, and do I understand their risk profile in terms of what a bad year or a bad quarter would mean for my financial position? Am I using the tax-efficient wrappers available to me — the Stocks and Shares ISA, the Self-Invested Personal Pension — or am I generating unnecessary tax drag on returns?

The broader narrative of the pandemic investment boom has in many ways obscured a more important long-term question, which is not ‘how many people opened a trading account in 2020’ but ‘how many of them are still invested five years later, in suitable products, inside appropriate wrappers, with a plan that reflects their actual financial circumstances and objectives.’ That is a harder question. It is also the one that matters.

The retail participation data tells us about the entrance to the market. Outcomes are measured at a different point entirely. The UK retail investment landscape has genuinely broadened since 2020 — but the gap between opening an account and building wealth over time is the gap where most of the real work, and most of the real risk, actually lies.