Almost two-fifths, 38%, of HNWIs say they hold more cash than they did three years ago, with cash accounting for an average of almost a fifth, 19%, of their total wealth.
New research from Flagstone shows that many HNWIs are now actively choosing cash as a destination in its own right.
The study suggests that 42% of HNWIs prefer to hold cash while waiting for the right investment opportunities, instead of committing capital to underperforming or unnecessarily risky assets.
When deciding where to hold cash, 76% of HNWIs say maximising interest rates is their top priority, highlighting the expectation that cash should deliver competitive returns rather than sit idle.
Flagstone said that the result is that cash is now commanding a greater share of adviser-client conversations as a deliberate component of wealth planning.
John Martin, chief product officer at Flagstone, said: “Cash is being used far more deliberately than it was even just a few years ago. It’s no longer seen as a temporary holding while investors wait on the sidelines, and advisers are increasingly turning their attention to dynamic, deliberate and high-performance options for their clients' cash allocations.
“What we’re seeing is a clear change in mindset, among both advisers and clients. Cash has been elevated in HNWIs’ eyes as a credible alternative to investing when the risk-reward trade-off elsewhere isn’t compelling. If clients want risk mitigation, capital protection and a guaranteed return, choosing cash is often the most rational decision.”
UK small and mid-sized businesses (SMEs) are also building larger cash buffers, according to the research.
More than a fifth, 41%, of SMEs say their cash reserves have increased over the past three years, with businesses now holding an average of nine months’ working capital in cash.
Looking ahead, the approach shows little sign of reversing, with 34% of SMEs expecting to increase their cash reserves further in 2026.
Mr Martin said: “What’s notable is that higher cash balances aren’t simply a defensive reaction. SMEs are holding cash to preserve flexibility, so they can manage costs, withstand disruption and still act decisively when opportunities emerge.”
• Research commissioned by Flagstone, carried out by Censuswide December 2025, surveying 100 financial advisers and wealth managers, 100 HNWIs (defined for the purposes of the research as individuals with more than £100,000 in investable assets), and 100 small to medium-sized enterprises (SMEs)