This is unsurprising really because, with investments, there is a risk of losing all of your money if companies or projects fail.
The average amount of savings in the UK was around £10,000. It makes sense to have good financial defences before taking investment risks, and most simply cannot afford, or do not choose, to take these risks.
One of the best ways for small investors to reduce risk is to invest in ‘pooled’ funds, each of which will hold shares across many companies. Our guide to ethical investment funds examines pooled funds which claim to be ethical. Some of these have now been around for nearly 40 years in the UK and financial returns from them have generally been much better than money saved in bank accounts.
Nevertheless, it is important to note at the outset that there is another way of thinking about ethical investment. We have been writing about this ‘alternative investment’ approach at Ethical Consumer for thirty years now, which also has been known variously as ‘direct ethical investment’ or ‘positive investment’ over that period.