The UK has the lowest rates of ETF adoption and awareness out of the 15 European markets captured within BlackRock’s 2025 People & Money survey.
Just 12% of British investors make use of ETFs in their portfolios – well behind the European average of 25% – while 64% of UK investors have never heard of an ETF, the highest awareness shortfall in Europe.
The study, commissioned by BlackRock in partnership with polling platform YouGov, has been running since 2022 and involves asking more than 40,000 adults across 15 European markets why, how much and in what ways they use ETFs.
The findings show that the use of ETFs continues to grow across Europe, albeit at different speeds between countries. For example, the number of investors using the wrapper has surged almost 200% in the Netherlands since 2022 whereas in Italy the number has grown just 15%.
In the UK, ETF adoption has more than doubled over the three-year period but at 12% remains the lowest in the region. Growth has been most pronounced in the 25-34 age group and slowest among those over 55.
The UK also remains far behind its peers on awareness and understanding of ETFs. More than 60% of investors have never heard of the product – a Europe high – while 20% have heard of them but are yet to develop even a basic understanding.
The figures highlight the UK's financial literacy problem. When the Financial Conduct Authority (FCA) announced its recent ‘targeted support’ reforms – a new type of help to address the advice gap where firms can make suggestions to everyday investors with common characteristics – the City regulator noted that 24% of UK adults with more than £10k in cash savings do not invest at all because they know too little about it.
Putting this dry powder to work in the stock market is seen by the government as a potential lever to power economic growth. Earlier this month, the Department for Education announced that financial education would be added to the school curriculum from 2028, a widely welcomed development.
“Instilling financial fluency in the curriculum is a vital step towards ensuring every child has the tools to make informed decisions and set themselves up with a strong financial foundation, benefitting both individuals and the wider economy,” commented Helen Wilson, head of responsible business at wealth management firm Rathbones.
The top motivation among UK investors to begin investing – cited by 42% of the respondents – was: ‘I realised investing could grow my money more than cash savings’, the BlackRock survey found.
Several long-standing hurdles have slowed the adoption of ETFs by UK investors. Many retail-focused platforms still charge commissions each time an investor buys or sells shares of an ETF – traditional mutual funds are traded for free – while the lack of fractional dealing makes buying a diversified basket of ETFs impractical in small sizes.
This is a problem that HSBC Securities Services is looking to tackle with a new solution that handles the on-exchange dealing and fractional trading of ETFs for UK fund platforms which are existing clients of the bank, as ETF Stream first reported.
Fractional trading could help to popularise ‘ETF savings plans’ which allow ordinary savers to invest modest amounts of cash into ETFs on a regular basis, typically monthly after each paycheck. Their popularity has made Germany by far Europe’s most advanced adopter of ETFs, with 55% investors making use of the wrapper.
The survey found that 30% of UK adults would be interested in starting an ETF savings plan over the next two years, including 21% of those who do not currently invest at all.
Diversification across companies and markets was cited by UK investors as the key reason for using ETFs, followed by the potential for better returns than cash or other investments in second. Low management fees was the third most important reason.
