The Financial Future of Self-Made Individuals in the UK

A recent study conducted by Santander UK and the Centre for Economics and Business Research (Cebr) suggests that individuals who have climbed the income ladder possess approximately £40.7 billion in savings that could serve as a catalyst for stimulating the UK economy. These individuals, classified as "self-made" due to their humble beginnings, now belong to the top 20 percent of earners in the country, with an average annual income of £52,000 or more.

The research, which was based on a survey of 2,000 top earners carried out in early 2023, revealed that self-made individuals typically hold around £40,000 in cash savings. However, many do not take advantage of effective methods for managing these significant funds. Additionally, the study highlighted that many high-earners in this category began their careers via apprenticeships or immediately entered the workforce after completing school, with a notable number employed in skilled trades such as construction.

This presents a considerable financial resource that remains largely untapped for national economic growth. Indeed, the findings showed that over a third (35 percent) of self-made individuals are the first in their family to pursue a professional role in a white-collar job. Interestingly, more than a quarter (28 percent) of those surveyed do not allocate any investment from their monthly income. Among those who do invest, they typically set aside 11 percent of their earnings.

While nearly half of the respondents (47 percent) acknowledged the importance of investing, 22 percent admitted they felt uncertain about where to begin, and 8 percent expressed the belief that investing is not meant for people like them. The background context also revealed that just over half (52 percent) of these self-made individuals discussed financial matters at home during their upbringing, a stark contrast to the 74 percent of high earners in general. Furthermore, less than half (45 percent) considered themselves financially savvy despite 13 percent owning a business.

In light of these findings, Santander has stressed the necessity of integrating financial education into apprenticeship programs. According to Kitty McCormick, head of wealth at Santander UK, unlocking this potential goes beyond just the missed opportunity for personal advancement; closing the investment gap through targeted financial education could have a profound impact on the UK economy and its communities. She emphasized that while the self-made individuals have already demonstrated their earning capacity, they now require additional tools, knowledge, and confidence to maximize the effectiveness of their income.