Britons, our businesses need YOU to take risks

Brits have become too cautious, and business is suffering because of it. It’s time for us all to embrace risk, writes the City of London Corporation’s Chris Hayward

The UK has become allergic to risk, and the antidote cannot come soon enough. As we face growing global challenges and navigate a rapidly changing economic landscape, it’s time to abandon our fear of risk and embrace responsible risk-taking. For too long, we’ve played it safe, but in doing so, we risk being left behind.

The UK’s services sector remains a key contributor to the country’s economic resilience, even though growth in the last quarter of 2024 was only 0.1 per cent. The City of London remains a beacon of financial and professional services, serving as the engine room of the UK economy. Business confidence in the Square Mile is at an all-time high, with a workforce of 678,000 – 25 per cent larger than pre-pandemic levels. The past year saw a record 331 office leasing deals, drawing major global players like HSBC, Clifford Chance and Moody’s to expand their footprint. Additionally, the tech sector has flourished, with 11 unicorns emerging in fintech , AI and data. However, despite these promising figures, there are growing concerns that the UK may be falling behind in critical areas, notably tax, regulation and skills. These were highlighted in our latest benchmarking report , published last week.

A cautious nation

This drop is partly due to the UK’s reluctance to take risks – both as investors and as regulators. We are sitting on £430bn of untapped consumer savings, but only 39 per cent of UK adults are active investors, compared to 61 per cent in the US. This isn’t just a financial issue – it’s a cultural one. The UK has become too cautious, too fixated on avoiding failure instead of seizing opportunity. But we cannot achieve growth without a change in mindset. We must embrace responsible risk-taking to unlock our potential.

At the heart of this is a need for regulatory reform. The Financial Conduct Authority’s (FCA) Advice Guidance Boundary Review is a step in the right direction, but we must go further. We need to simplify the investment process, remove barriers to entry, and help consumers understand the rewards – and risks – of investing. We must empower people to take calculated risks, not just save, but invest in the dynamic UK economy.

How can we encourage Brits to take risks?

The UK’s regulatory framework should encourage investment without sacrificing consumer protection. We don’t need to deregulate, but we must differentiate between wholesale and retail markets. Regulation must be proportionate to the risks and rewards involved. We need to create an environment where consumers feel confident to invest and businesses are free to innovate. It’s time to stop fearing failure and start celebrating success, and standing by the regulators even when things don’t go perfectly.

This approach is vital not just for individual investors, but for businesses looking to grow and compete globally. For example, the UK has led the way in sustainable finance, but to maintain that leadership we need to keep innovating. London is home to the world’s largest tech ecosystem outside of New York, and our commitment to net-zero transition finance positions us as a key player in global green finance.

But we need more. We need to encourage greater flows of capital into investment products like ISAs, transforming them from simple savings vehicles into dynamic investment tools. We need to build a culture where risk-taking is celebrated as a source of growth, not something to be avoided at all costs.

As the City of London continues to evolve, we must focus on policies that deliver both quick wins and long-term competitiveness. The government and regulators must adopt a new spirit of responsible risk-taking. The UK’s future success hinges on our ability to adapt, evolve and embrace risk.

Chris Hayward is policy chairman at City of London Corporation