1.2.1 UK household investments (excluding pensions)
The table below provides a breakdown of the types of savings, investments and accounts that households have in the UK. As you can see, virtually all households have a current account, and a significant proportion have at least one form of savings account. Lower proportions of households have stocks and shares, and nearly one-sixth of households have investments in premium bonds. In 2021/22, four per cent of households had no kind of bank account, let alone any investments. You shall be looking at some of these products in more detail in Week 2.
| Type of account | % of households |
|---|---|
| Current account | 95 |
| NS&I savings account | 3 |
| Basic bank account | 3 |
| ISA | 31 |
| Other Bank or Building Society account | 47 |
| Stocks and shares/member of a Share Club | 11 |
| Unit trusts | 1 |
| Premium Bonds | 16 |
| National Savings Bonds | 1 |
| Company Share Schemes/profit sharing | 1 |
| Credit unions | 1 |
| Other | 1 |
| Any account | 96 |
| No account | 4 |
These figures are interesting, but do not tell us very much about exactly why some households have savings and other financial assets and others do not.
The Family Resources Survey provides investments by some of the social and economic variables such as income, household composition, age and ethnicity of households, and these can help explain the differences in household investment behaviour.
Some findings from the 2020 and the 2023 Family Resources Surveys are as follows:
- As might be expected, low-income households tend to have a lower value of investments and higher-income households have a higher value of investments.
- Households where the named head, or spouse of a household head, is unemployed or disabled are much more likely to have no investments at all.
- Pensioner couples, single male pensioner households, and couples without children tend to have higher investments, while single adults with children households have the lowest levels of investments.
- Asian and Black ethnic groups are slightly more likely to have no investments than White households.
Some of the above points remind us that investing will not be easy for everyone. It is easier to build up investments as household income increases. For those on lower incomes, investments have to be built up through careful budgeting.