The cost of living and household expenses remained the most important factor driving investment decisions in the second quarter of 2026, research from Scottish Widows has revealed.

Overall, 81 per cent of UK investors cited the cost of living and household expenses as an influence on their investment decisions, up 10 percentage points from the first quarter.

The latest Scottish Widows Investment Pulse, which surveyed more than 2,000 non-advised UK retail investors in June, also showed a rise in the number of people citing geopolitical conflict, up 15 percentage points to 60 per cent.

Manuel Pardavila-Gonzalez, managing director of investments at Scottish Widows, said: “Investors have shown real resilience this quarter, increasing their contributions even as global conflict has escalated and the UK political landscape has shifted expectations.”

The overall results for factors influencing investment decisions were:

Factors influencing investment decisions	Influence
Cost of living/household expenses	81% (up 10pp)
Change in personal financial circumstances	73% (up 7pp)
Inflation	72% (up 9pp)
UK political uncertainty	63% (new in Q2)
Geopolitical conflict	60% (up 15pp)
UK fiscal policy/budget	59% (up 10pp)
Bank of England base rate	56% (up 6pp)

Scottish Widows

The proportion of investors increasing contributions in Q2 fell to 26 per cent from 30 per cent in Q1.

However, average portfolio contributions increased by 47 per cent, from £2,413 in Q1 to £3,554 in Q2.

A further 26 per cent made no or very limited changes to their portfolios in Q2, while 13 per cent moved some investments into cash, 12 per cent sold some investments and 12 per cent invested more in individual shares.

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That was followed by investors putting more money into cryptocurrency (9 per cent) and gold (8 per cent).

Pardavila-Gonzalez added there was “a clear sense that investors are remaining level-headed”.

“Even as the cost of living continues to bite, most aren’t reacting to short-term noise or alarmist headlines — they’re staying the course rather than making knee-jerk decisions,” he said.

In terms of investment themes, artificial intelligence was the most popular choice at 35 per cent, followed by renewable and clean energy infrastructure (25 per cent) and no specific themes or sectors (23 per cent).

While UK-held investments remained the largest single allocation, the proportion fell from 62 per cent in Q1 to 57 per cent in Q2.

Meanwhile, allocations to North America increased from 16 per cent to 21 per cent.

hereward.mills@ft.com

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