‘Off-putting’ jargon was one of the key factors discouraging investors from switching from cash savings to investments, the survey for wealth manager Charles Stanley revealed.

The survey found less than half of investors (45%) fully understand inflation, only 35% know and understand what dividends are and only 20% understand compounding. Just 14% fully understand SIPPs and only 7% have heard of and understand robo-advice.

Source: Charles Stanley

Nearly 1 in 4 UK investors wanting to invest were put off by a series of factors which Charles Stanley calls the 4 Cs:

• Communication - 55% of those surveyed were put off by jargon and financial terms they did not understand with only 45% of men confident they understood industry terms and only 37% of women
• Complexity: 20% found keeping on top of the data “too challenging”
• Concerns over Risk v Reward: 40% said they were concerned about market volatility and felt investing was too risky
• Choice: 14% said they were overwhelmed by the number of choices 

Charles Stanley says an investment gap has opened up over the last decade as savers opted for cash savings but typically received 94% lower returns than investors.

The reasons that prompt people to consider investing are poor returns on cash savings (33%), followed by saving for retirement (32%) or for a house (16%).

Among Generation Z (aged under 23) investment appetite is driven by a desire to save for a house (30%) and being worried about running out of money (27%).

The main drivers to invest for Millennials (aged 24-39) were poor returns on cash savings (28%) and saving for a house (26%).

Generation X (40-55) is saving for retirement (43%) and to beat poor cash returns (38%).

To support first time investors Charles Stanley Direct has launched a New to Investing hub.

• Research was carried by Censuswide among 2,128 British adults 18+ in October.