With an estimated £430bn sitting in cash instead of being invested, the scale of the investment gap is staggering, warns behavioural finance expert Oxford Risk.

Many people leave surplus cash on the sidelines because it feels safe, but this perceived security comes at a high cost—potentially up to 5% a year in lost returns, it said in a statement on 3 February.

The investment gap – where investors hold money in cash which could be invested – can cost investors up to 5% each year in terms of lost returns, and it's likely that increasing numbers of investors are being negatively affected by this, say the London-based suitability software firm.

The Financial Conduct Authority (FCA), despite making this a core goal in their 2022-2025 Consumer Investments Strategy, have not published 2024 data (as they have in previous years) on the numbers of adults with £10,000 plus in investible assets who keep 75%-plus of their assets in cash.

But previous data showed a worrying trend – when the FCA first started measuring the number in 2020 it was 55% (or around 8.4 million people), rising to 58% in 2022 (or around 9.7 million people) and finally 61% in 2023 (or around 11.8 million people). In addition, research towards the end of 2024 estimated the UK has an investment gap of £430 billion, with 13 million UK adults holding money in cash which could be invested.

Despite not publishing 2024 figures, the FCA has said increasing cash deployment remains one of its key strategic outcomes and wants consumers to “invest with confidence, understanding the risks they are taking, and the regulatory protections provided”.

The FCA’s Consumer Investments Strategy** now fits within the wider FCA Strategy and they have confirmed that these specific metrics will no longer be published.

Oxford Risk said it’s clear that much more needs to be done beyond just raising awareness of the issue to drive the vital change in investor behaviour.

The solution lies in innovation, it said. Technology can provide the hyper-personalised engagement needed to tackle emotional and behavioural barriers at scale, turning missed opportunities into better outcomes for investors.

Oxford Risk’s white paper, Behavioural Engagement Technology: Using technology to understand, map, and improve engagement in personal finance outlines how using AI and machine learning to engage investors can improve financial outcomes and grow assets under management for advisers.

Greg B Davies, head of behavioural finance, at Oxford Risk said: “Many people leave surplus cash on the sidelines because it feels safe, but this ‘safety’ comes at a steep cost—potentially up to 5% a year in lost returns. The FCA made addressing this issue a priority years ago, yet progress has been negligible. The fact that the latest figures haven’t been published may well reflect that there has been no meaningful improvement.

“Behavioural and emotional barriers are at the heart of this problem. Overcoming them requires more than just awareness—it demands tailored, technology-driven solutions that engage investors on a personal level.

“By using innovative, personalised engagement technology, financial firms can help investors overcome biases, get invested, stay invested, and make better decisions. This is key to closing the investment gap and delivering better outcomes for everyone.”