Metis AM
Cash can form a valuable part of your financial plan, giving you access to money when you need it to cover unexpected costs and providing reassurance during uncertain times.
Yet, research suggests that many UK adults may be holding more than they realistically need.
According to Vanguard, 30% of working-age UK adults hold more cash than they need to cover emergencies, equating to an investment opportunity of more than £200 billion.
What’s more, over half of these individuals don’t invest, while even those who do invest still hold most of their assets in cash.
If you’re in the same boat, a significant proportion of your wealth could be missing out on the opportunity for long-term growth.
Of course, there are valid reasons to feel cautious about investing, as the value of your investments can fall as well as rise, and you may not get back the full amount you invested.
Still, holding too much in cash can also carry risks.
Continue reading to discover why Brits may be hesitant to invest and how you can decide whether some of your cash might work harder somewhere else.
Cash can be useful, but holding too much may limit the long-term growth of your wealth
It’s vital to remember that cash does have its place in your financial plan. For instance, you may want to hold cash for:
- An emergency fund
- Short-term spending
- Holidays
- The deposit for a property
It may be prudent to hold up to six months’ worth of essential household expenses in an easy access savings account. If you have many dependants or are nearing retirement, you may want to hold as much as 12 months’ worth of expenses.
This can help ensure you aren’t forced to sell investments or take on high-interest debt if the unexpected happens.
However, once you have enough for short-term needs and potential emergencies, you may want to determine what to do with the rest of your money.
Even if your cash savings are earning interest, inflation can erode the real-term purchasing power of your wealth. If inflation is higher than the interest rate you receive, your cash may grow on paper but still buy less in future.
Research from Fidelity found that, over the course of 2025, UK savers lost approximately £17.6 billion, as the average returns of easy access savings accounts struggled to keep pace with inflation.
This could make it more challenging to achieve your long-term goals, such as bolstering a retirement fund or helping children onto the property ladder.
Many savers lack confidence when it comes to investing
Perhaps one of the biggest hurdles involved with investing is confidence. In fact, Vanguard’s British Money Mindset 2026 survey revealed that around 70% of savers lack confidence in their investment knowledge. This is often due to:
- Perceived complexity
- Fear of loss
- Uncertainty over where to begin
This is somewhat understandable, as investing involves risk, and it can be difficult to feel comfortable when markets are constantly rising and falling.
You may even worry that investing is only for people with significant wealth or specialist knowledge of markets. However, a well-structured portfolio can be designed around your goals, time frame, and attitude to risk.
It can also spread your wealth across various sectors, geographical areas, and asset classes to reduce your reliance on a single investment.
Interestingly, the survey above states that 71% of investors say investing was much easier than they initially expected, showing that the hardest part may be taking that first step.
Investing could offer more competitive long-term growth than cash
Aside from outpacing inflation, another notable advantage of investing over saving is the potential for higher long-term returns.
While cash is suitable for money you need soon, investing could be more appropriate for funds you don’t expect to use for the next 10 years or so.
This is because investments tend to have more time to recover from periods of short-term volatility and benefit from long-term growth.
According to Barclays, if you had invested £20,000 in 2006, by 2026 this would have risen to:
- £123,660 if you had invested in global equities
- £25,590 if you’d held it as cash savings
Of course, past performance doesn’t always guarantee future returns. There might be periods when your investments fall in value, and if you need the money in the near future, this could cause issues.
Yet, if you’re investing for long-term goals, such as retirement, accepting some short-term risk could give your money a significantly better chance of growing in real terms.
You don’t have to invest everything all at once
If you’re still uncertain about investing, it’s important to remember that you don’t necessarily have to invest large sums of your wealth at the same time.
In fact, you may prefer to start with smaller but regular monthly contributions. This approach is often referred to as “pound cost averaging”.
It involves investing fixed amounts at regular intervals. When markets are higher, your contribution buys fewer shares. When lower, it buys more.
Over time, this could help “smooth” the average price you pay and reduce the pressure of trying to choose the “ideal” time to invest.
Speak to Metis Wealth if you want to invest your wealth confidently
Investing isn’t entirely free from risk, and it might not be suitable for every pot of money you have. Still, with the right strategy, it could help you build your wealth over the long term and help you make real progress towards your future goals.
If you’re unsure where to begin or want to review whether your portfolio is still appropriate, you might want to speak to Metis Wealth.
We can help you understand how much cash savings you may need, the levels of risk you’re comfortable taking, and how investments could support your financial plans.
To find out more, please email enquiries@metiswealth.co.uk or call 0345 450 5670.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.