Savvy approach to investment

“Targeted support”, the latest kind of financial help for consumers which is not quite full advice, but more than generic guidance, was launched in early April.

Two firms so far have broken cover to say they’ve received the appropriate permissions and we can expect to hear more from them about what they’re offering later this year.

The introduction of targeted support fits with the broader UK Government ambition to encourage savers to move money out of low-yield cash savings and into retail investment products. With billions of pounds sitting in savings accounts earning relatively modest – or in many cases negative in real terms – returns, the government sees an opportunity to channel more of this capital into the markets. A win-win situation would be improving long-term outcomes for savers, while also supporting the government’s wider growth agenda by increasing the flow of investment into businesses and infrastructure.

However, it’s almost impossible to be unaware of the current turbulence in the financial markets. Even being on the far side of the Moon means you’re still within reach of the startling daily news headlines – and of the President of the United States – as the Artemis II astronauts found out, so what chance is there for those of us nervously checking the state of our pension funds on Earth?

For many of us, the idea of moving money into investments may feel risky, particularly after a prolonged period in which cash savings offered a sense of stability and accessibility. Right now, do you want to put your cash nest egg, which you may have saved up over some time, into the turmoil of the stock market?

This tension between policy ambition and understandable consumer caution will be a central challenge for both policymakers and industry in the months ahead.

Nevertheless, a major ad campaign has just launched to promote the benefits of investing. The campaign is funded by some of the biggest names in the financial services industry and supports the government’s growth objective.

Fronted by Savvy the Squirrel, it is the latest in a long line of campaigns advertising savings products using everyone’s favourite garden rodent. I very much encourage you to look up the advertising campaign in the US from 2022 which featured Christopher Walken as squirrel news anchor, if only to hear the way he pronounces the word “squirrel” seemingly without using any vowels at all.

Encouraging individuals to take on more investment risk when the world and the financial markets appear to be swinging between triumph and disaster on a daily basis requires careful communication, and a strong emphasis on suitability and long-term thinking.

But doing nothing also carries risk. With inflation eroding the real value of cash savings over time, savers will see their purchasing power decline if they remain overly reliant on traditional savings accounts. Seen this way, targeted support and improved engagement with investing could help people build greater financial resilience.

If the new campaign manages to cut through to the people it needs to address, and targeted support is clear about what it’s offering to people who need help, they could both drive a significant shift in how people across the UK approach saving and investing. But it may not be the time to be digging up all your acorns from the garden quite yet.