However, latest figures show that amid a surge in retail investor activity, Scottish Friendly‘s January sales hit a new high last month, up by a third (+33%) year on year.

Scottish Friendly’s Investor Index tracks adult investment ISA policy sales and the total value of these new policies among Scottish Friendly’s UK-wide customer base, with quarterly activity measured against a base rate of 100.

The value of all new investments in Q4 2020 is equal to Q3 and remains down by -24% on the peak seen in Q2 2020.

The latest Index figures show levels of new investment into stocks and shares have levelled off following a rush of activity in the second quarter of 2020, when official data revealed that the UK household savings ratio had reached an all-time high of 29.1%.

Since Scottish Friendly started tracking the Index data in Q1 2019, older investors have consistently been the most active. However, while new policy sales and new policy value dropped among investors in the higher age brackets (35 to 49 and 50 to 64) in Q4, demand has increased among younger investors.

The number of stocks and shares ISA policies opened by people aged 18 to 34 rose by +4% quarter on quarter while the value of new investments was up +9% on Q3.

There is also evidence of a clear gender swing when looking at how investment activity has changed year-on-year. New policy sales and new policy value were both higher among women in Q4 2019 but they have dropped by -4% and -21% respectively in Q4 2020.

In contrast, new policy sales among men increased during this period, up +15% year-on-year in Q4 2020. New policy value is down slightly (-4%) among male investors quarter-on-quarter but considerably less than among female investors.

Kevin Brown, savings specialist at Scottish Friendly, said: “The past 12 months have been particularly volatile for the Index and it shows how investors’ interaction with stocks and shares has swung wildly.

“In 2019, the Index was relatively stable with minor fluctuations in new policy sales and value, but as the pandemic struck in Q1 2020 we saw a huge drop off in activity before a big spike in the three months to June. A period of levelling off then followed in the second half of the year and in the run up to Christmas, which traditionally impacts households’ capacity to save.

“Early in 2021, we are seeing another new wave of activity as interest from retail investors spikes once again and we expect this increased demand will continue throughout much of Q1.”

He added: “The long-tail of the Wall St blitz seems to be galvanising many retail investors and while not everyone may be willing to start trading stocks, it is helping to contribute to increased stock market awareness.

“At Scottish Friendly, we try to break down the barriers to investing and we are encouraged to see more people being introduced to stocks and shares at a time when cash returns remain at record lows.”