Targeted support based on consumer attitudes is significantly more effective at encouraging investment than approaches based solely on demographics, research from The Investing and Saving Alliance (TISA) and the University of Nottingham has found.

The study, conducted with Barclays, Lloyds Banking Group and Vanguard, showed that tailoring investment recommendations to factors such as risk appetite, return expectations, and home bias increased investment by at least 30 per cent more than demographic-based approaches.

The findings come after the UK’s new targeted support framework launched on 6 April, aiming to help close the advice gap and improve engagement with investing.

The research identified several key behavioural barriers to investing, including risk aversion, expectations of low returns and a preference for keeping money in the UK.

However, when recommendations were designed to reflect these attitudes, investment levels rose materially.

Overall, any form of targeted support increased investment allocations, with average allocations rising from around £6,650 in a control group to at least £8,100 when recommendations were provided.

Yet, attitude-based approaches delivered even stronger outcomes.

For example, individuals with a UK home bias invested 47 per cent more when given UK-focused recommendations than when receiving no tailored support.

The research also found that attitudinal targeted support had a greater impact on groups less likely to invest, including women and first-time investors.

Indeed, investment allocations increased by 31 per cent for women compared to 16 per cent for men, and by 53 per cent for those who had never previously invested, compared to 14 per cent for existing investors.

In addition, around two-thirds of participants followed attitudinal recommendations, compared to just over half for demographic-only approaches.

Consumers also reported high comfort answering attitudinal questions, suggesting that collecting this type of data is unlikely to pose a barrier to implementation.

Commenting on the findings, TISA head of policy: consumer protection and access, Sophie Legrand-Green, said the rollout of targeted support marked “a defining moment” for improving financial wellbeing.

“This research demonstrates that focusing on attitudes towards investing, rather than broad demographic assumptions, can give people the extra confidence boost to help them become investors.

“Evidence is clear that in the medium and long term, investing often produces better financial outcomes than keeping money in cash.

"But people need the support and confidence to begin their investing journey, and attitudinal targeted support is one of the most effective ways to do this.”

Barclays Private Bank and Wealth Management savings and investments director, Clare Francis, added that targeted support could play a key role in addressing the UK’s advice gap.

“Our own research shows there is over £610bn in excess savings that could be potentially invested, highlighting both the scale of the opportunity and the urgency of closing the advice gap,” she argued.

“TISA’s research demonstrates that once rolled out by firms, targeted support could act as a catalyst for meaningful behavioural change, strengthening the UK’s investment culture.”

Echoing this, Lloyds Banking Group investments representative, Sally Speake, said the approach could help those unsure where to begin.

“Rather than full, one-to-one financial advice, targeted support draws on shared behaviours and confidence levels to provide relevant support, helping people make decisions and move beyond doing nothing,” she stated.

Meanwhile, Vanguard UK head of product and client experience, Liz Waldron, highlighted the potential to engage underrepresented groups.

“There are nearly six million UK adults with the resources to invest whose savings are either entirely or mostly in cash,” she noted.

“If we meet people where they are, through targeted support journeys that acknowledge how they actually feel about money, we have a real opportunity to help more people achieve their financial goals.”

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