The FTSE Is Up, So Why Are UK Investors Pulling Out Billions?
UK investors are pulling money out of the stock market at the highest level ever recorded for a calendar year, according to EPFR data published by the Financial Times.
UK investors are pulling money out of the stock market at the highest level ever recorded for a calendar year, according to EPFR data published by the Financial Times.
So far in 2025, according to the data, more than £26 billion has been pulled from London-listed equities, despite the FTSE having a great year.
It’s a weird one; the FTSE has gone up more than 16% this year, which is more than the S&P500, which is up 12.6% and the Europe600 Index, which is up 10.7%. (FT) You’d think this would cause an influx of capital and trust, but investors are actually heading in the opposite direction.
It seems like ever since Rachel Reeves announced on the 26th November, UK tax residents, companies and investors have all felt an air of anxiety.
It’s no secret that the government needs to raise money to fill the ‘black hole’ in UK finances. And whilst they did recent rule out increasing income tax, there has been a lot of speculation around whether capital gains tax, pension allowances and the tax-free pension sum could come in the firing line.
So far in 2025, according to the data, more than £26 billion has been pulled from London-listed equities, despite the FTSE having a great year.
These fears have had a real economic impact. UK investors pulled out £3.4bn from London-listed stocks in October alone, making it the highest monthly outflow of the year.
Global Uncertainty And Fears Around A ‘Bubble’
Another layer to add to the mix is worries about an unless the government acts. The report found that while 85% of startups want to keep their base in Britain, 20% might relocate if conditions do not improve.
Additionally, many entrepreneurs are agreeing that the shared with TechRound that “For many on Wall Street, the idea of a UK tech champion choosing the London Stock Exchange is almost unthinkable. That should worry us all.”
Can The Government Bring Investors Back?
For investors and businesses, the budget on the 26th November will bring a new financial landscape to navigate. However, aside from just raising taxes, the UK government also needs to rebuild confidence in UK markets.
As the FTSE pushes to record highs, the challenge will not just be driving more investment into the UK, but retaining it.
So, how will the budget affect the markets? We wait and see.
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Based on reporting by techround.co.uk.