Low interest rates on cash savings are driving over half (54%) of adults to move money into investments, according to a new report.

One in 10 of those surveyed by Aegon said they have put all their extra savings into investments, rising to 15% for those aged between 18 and 34.

Interest on savings falling below 2% was the tipping point for most people putting more money in to investments.

A third (35%) said interest rates falling to between 1-2% was the tipping point and a further 39% said it was when interest rates fell below 1%.

Almost half (45%) of those surveyed have kept their money in cash savings despite low interest rates.

The FCA’s latest paper on the consumer investment market suggests there are 8.6 million UK adults with investable assets of £10,000 or over in cash. The FCA has said that many of these cash savers could benefit from investing and has set itself a target of reducing (by 20%) the number of those holding over £10,000 in cash who are able to take more investment risk.

Steven Cameron, pensions director at Aegon, said: “Despite the rising popularity of investing, there is a proportion of adults who, despite interest rates just scraping above zero, are saving large amounts of excess money in cash. While this might be used to build up a ‘rainy day fund’ or pay off debts, people with large amounts of savings which don’t need to be accessed in the short-term could have a more realistic chance of earning a real rate of return through investments.

“The research shows the under 35s are the most likely to put all of their extra savings in investments. This could prove beneficial over the long-term as cash invested at a younger age has the longest period to benefit from compound investment growth. But, throughout the pandemic we’ve seen younger investors getting involved in higher risk investments, so it is important there is an understanding of the risks involved, including from the threat of scams.”

The research also looked at investors' attitudes towards an investment that promises high returns, often an indicator of a scam.

It was only when an investment promised a return of 10% or more a year that the majority become sceptical of scams.

When faced with a promise of high returns, six in ten (59%) said they would research the investment further before investing. A third (35%) said they would avoid these types of investments altogether in case of scams.

One in 20 (5%) said they were less concerned about safety and always looked to investments offering the best return.