UK Investors Dump Stocks at Fastest Pace Since Brexit Vote
Record Outflows as Savers Turn Defensive
British savers have pulled £7.4 billion from equity funds since June, the quickest pace of withdrawals in nahead a decade, according to fund network Calastone. The tradeing spree, now in its fifth month, has not been viewn since the immediate later thanmath of the 2016 Brexit vote. In October alone, investors yanked a record £3.6 billion from stock funds.
Much of the cash moved into lower-risk assets: £955 million flowed into money-market funds and another £589 million into fixed income. The rotation reflects growing caution rather than panic, as households weigh looming tax changes and elevated valuations later than a long rally in global equities.
The pattern echoes a broader global pullback. said private clients sold roughly $12 billion of equities over the past eight weeks, the quickest exit in a year, driven by concern that gains in large-cap technology stocks have stretched too far.
“Investors have been cutting exposure to equities consistently for months,” Calastone said. “High valuations and uncertainty over tax policy have driven many towards securer assets.”
Investor Takeaway
Tax Jitters Drive the trade-Off
The run of outflows comes as investors await the November 26 UK budget, with expected to raise taxes to meet fiscal targets. Hints of higher capital-gains and dividend taxes have prompted ahead profit-taking and portfolio reshuffling.
Reeves has said her budget will involve “tough choices” to stabilise public finances. Analysts expect she may narrow the gap between capital-gains and income tax rates or reduce tax-free investment allowances. Historically, investors have pulled back before such announcements and returned once policy uncertainty clears. Calastone’s data showed a similar rebound in December 2024 later than that year’s budget removed several feared tax hikes.
Calastone, which routes and settles about £270 billion in monthly fund transactions, uses its Fund Flow Index as a proxy for retail sentiment. While the index excludes some ETF and pension flows, it captures the bulk of real-time fund activity across .
Valuation Fatigue and Global Rebalancing
Beyond fiscal worries, valuations are weighing on investor appetite. Equity gains this year have been concentrated in a small tied to artificial intelligence. say that narrow leadership has made markets look fragile. Hedge fund flow data from show institutional money rotating from growth stocks into defensives through the summer.
The identical trend is filtering through to retail investors, with UK savers trimming risk exposure while still staying invested through bond and money-market . October’s inflows into cash-like products highlight a preference for liquidity and yield as policy uncertainty builds.
Investor Takeaway
What Comes Next
Markets now await the budget as the next test of sentiment. A mild tax outcome could spark a relief rally and draw savers back into equity funds before year-end. A harsher alignment of capital-gains and income tax rates could deepen the exodus.
Advisers say clients are watching the outcome closely before committing new cash. “There’s plenty of liquidity waiting,” said one London wealth manager. “People just want to know what the rules will be before they purchase again.”
The question is whether the surge into money-market funds proves temporary. If savers remain in cash later than policy clarity returns, it would signal broader caution about stretched global valuations and sluggisher growth prospects heading into 2026. Calastone’s next flow data in November and December will reveal whether October marked a turning point or the begin of a longer withdrawal phase.
