ERC Chart of Week: Ownership of UK Shares
Ownership of UK Shares
The latest figures for UK share ownership were released this morning, and they showed that foreign investors still own more than half of the value of all UK shares. However, they also showed an increase in ownership by UK individuals for the first time since 1998.
What does the chart show?
Measured against the left hand axis, the coloured bars show the proportion of the total market value of all UK shares held by various groups (blue for individuals within the UK; red for insurance companies; green for pension funds; purple for international investors; and orange for all the other groups combined, including a wide range of entities from non-financial organisations to the public sector which all hold a relatively small percentage of the total value). The black line, measured against the right hand axis, shows the total market value in billions of pounds, adjusted for inflation (in 2014 prices).
Why is the chart interesting?
The big news two years ago was that for the first time international investors owned more than half of the value of all UK shares, and that continued to be the case in 2014 with their total share staying roughly level. The main movements between 2012 and 2014 were the continued collapse of pension funds as UK investors, which has been going on since the early 1990s when they owned almost a third of the value of all UK shares, and an increase in the proportion of shares held by individuals. Private individuals now own more than 10% of the value of UK shares for the first time since before the financial crisis, after the first increase in their share of the total since 1998.
This chart really makes clear the decline in the importance of insurance companies, pension funds, and private individuals since 1990, when together those three groups made up over 70% of total ownership, to 2014, when they made up just over 20%. They have been replaced by foreign investors and, in the years since the crisis, unit trusts (which make up the bulk of the “Other” category).
Source: The Economic Research Council