How well do you know the FedEx logo? It’s a major global brand so you can probably recall it easily. But have you seen the arrow built into the design to imply direction and speed; qualities required in a courier? (There’s also a spoon but that’s coincidence not design). Once you’ve seen them, you cannot stop seeing them.
Human understanding works like this. We live with assumptions for years until new evidence changes how we see the world. Once that shift happens, we rarely return to the old view.
History contains many moments like this. A discovery, observation, or new piece of evidence suddenly reveals what was there all along. The insight that changes everything and leads to a great leap forward.
Evolutions & Leaps Forward
For centuries, many people believed that “bad air”, known as miasma, caused disease. Cities smelled awful, so the idea made intuitive sense. People focused on smells and ventilation rather than hygiene. It wasn’t until scientists such as Louis Pasteur demonstrated germs caused many illnesses that doctors came to understood that bacteria spread through contaminated hands, tools, and water. Once known sterilisation, sanitation, and hand washing hospitals became safer and life expectancy rose.
A similar shift occurred in navigation during the fifteenth and sixteenth centuries. For generations many sailors, fearing the open ocean, hugged coastlines. Better maps, improved instruments, and growing evidence from explorers showed that deep ocean routes could actually prove safer and faster. Once navigators accepted this, global trade expanded rapidly.
Charles Darwin’s seminal work on the origin of species and discoveries by palaeontologists over centuries has transformed our understanding of how life on earth formed and how it has become so diverse.
These breakthroughs did not happen because people suddenly became smarter. They happened because new evidence revealed blind spots. The same process also applies to how we think about money and investing.
The Power of Mental Shortcuts
Our brains rely on shortcuts. Psychologists call them heuristics. These shortcuts help us make quick decisions in complex environments. They also create blind spots.
We tend to remember dramatic events more clearly than gradual trends. This bias explains why many people fear aeroplane crashes more than car accidents, even though driving carries far greater risk.
Financial markets trigger the same mental bias. Stock market crashes make headlines. Television coverage shows red numbers, anxious traders, and falling graphs. Those images stay in people’s minds for years. The steady long term growth that creates wealth does not attract the same attention; a chart that rises gradually over decades rarely appears on the evening news.
As a result, many people associate investing primarily with risk and so avoid it. It also feels complicated so we avoid what we don’t understand.
Why Many People Avoid Investing
Cash feels safe. You can see it, access it quickly, and the value does not move up and down each day. Yet cash carries its own risk, inflation. When prices rise faster than savings interest, money quietly loses spending power. £100 buys you a lot less than it did just a few years ago, let alone a decade.
Despite this, many people still avoid investing. Major market crashes leave scars. The 1987 crash, the dot com collapse in 2000, and the financial crisis of 2008 still influence public perception today. Even if there was no personal pain, the collective psyche endures.
Pensions face a similar perception problem.
The Shadow of Past Pension Scandals
Some people distrust pensions because of high profile scandals from the past. Robert Maxwell’s misuse of company pension funds in the early 1990s shocked the public. Thousands of employees discovered that the retirement savings they relied on had been raided. Later, the collapse of Equitable Life damaged confidence again. Many policyholders saw their retirement expectations change overnight.
These events created lasting suspicion around pensions. For many savers, pensions began to feel complicated and risky. Again, this may not be from direct experience, I often hear the cause of someone’s distrust of pensions being rooted in their parents’ retirement dreams being shattered by poor financial advice or mismanagement. Yet modern pension regulation looks very different from those earlier decades. Oversight has strengthened considerably, and pension schemes now operate under strict rules designed to protect savers.
Still, memories linger. Once a negative narrative takes hold, it often persists long after the facts change.
A National Challenge
These perceptions now create a wider problem for the UK. Millions of people hold large amounts of cash in savings accounts, but invest nothing. According to the FCA’s 2024 Financial Lives survey, 61% of UK adults with over £10,000 in investible assets held most or all of it in cash, not investments. Cash is important, essential even. But not too much.
Fear of investing and a mistrust of pensions over a working lifetime has significant ramifications for the timing and quality of retirement. If the pot isn’t big enough, the ability to retire, let alone to live a desired lifestyle, is severely challenged. This is a problem that will soon become a crisis as more of the workforce retire without the benefit of generous defined benefit pension schemes. Not only will it be a crisis at the older end of the work force, if people are working longer they aren’t freeing up jobs for school leavers and graduates to move into.
Seeing the Evidence More Clearly
Just like the arrow in the FedEx logo, some financial truths remain hidden until someone points them out.
Once we understand inflation properly, cash no longer looks completely safe.
Once we examine long term market history, investing no longer appears scary.
Once we learn how modern pensions work, they begin to look like powerful long term savings tools rather than mysterious financial products.
If education and access to information and guidance, like the FCA’s targeted support approach, can give confidence to more people to take investment risk everyone will be better off. Individually, people will have greater financial capabilities, nationally there will be less reliant on the State, the government can raise more money from a growing economy and more companies will have support of more investors to grow and develop.
Andrew Neligan is a retirement financial planner in East Devon who helps individuals and couples in their 50s and early 60s plan their transition into retirement and create sustainable retirement income
