One in eight investors (12%) have withdrawn investments in the run up to the Budget, with one in three of these (4% of total investors) ‘explicitly’ citing concerns about the Budget, according to new research.

About two thirds (66%) of investors who have withdrawn money say they plan to reinvest after the Budget but over a quarter of investors have no plans to reinvest.

A quarter of investors say an increase in income tax or National Insurance in the Budget would discourage them further from investing, according to a survey of 1,000 investors carried out this month by polling organisation Opinium.

Opinium says rumours about the Budget (taking place next week on 26 Nov) have caused “anxiety” among investors with some “pre-emptively” withdrawing their investments. 

Since the start of October, one in eight (12%) investors have withdrawn some or all of their investments and 16% have moved their investments around. A quarter (28%) continued to add the same amount to their investments. 

Among those who withdrew their investments, nearly a third (32%) cited concerns about rumoured changes in the upcoming Autumn Statement, with another third (36%) citing concerns about market conditions.

Two in five (39%) say they needed cash or liquidity and a quarter (25%) said their financial goals had changed. 

Two thirds (66%) of investors who have withdrawn funds say they are planning to reinvest at least some of the money they have withdrawn in the last few weeks.

One in eight (12%) expect to do so within the next month, after the Budget, while another 17% plan to do so within the next three months. One in five (20%) plan to reinvest within the next six months, and 16% say they plan to reinvest but are not sure when.

Over a quarter (28%) of investors who have withdrawn investments have no plans to reinvest the money they have pulled out. 

A quarter (25%) of investors say that an increase to income tax or National Insurance contributions for employees would mean they were likely to invest less with this figure rising to a third (32%) among those with £10,000 or less in investments. Opinium says this suggests that tax rises are a particular disincentive for ‘smaller’ savers and investors. 

Rumours that the Chancellor may cut the tax-free limit for Cash ISAs from £20,000 to £10,000 could nudge two in five (41%) investors with cash savings to consider investing money that they would otherwise have put into their Cash ISA, including 30% into Stocks and Shares ISAs and 18% into other investment products.  However, over a quarter (28%) say they would simply move their cash into another savings product, and 5% would spend it. 

Eliza Arkuszewska, research manager at Opinium, said: “Our research underlines how sensitive UK investors remain to fiscal signals from the Government. Some are staying put for now to see what emerges from the Budget next week, but rumours of tax rises have prompted some investors to step back from the market, creating a temporary drag on investment flows at a time when economic momentum is still fragile.

“However, the fact that most intend to reinvest at some point after the Autumn Statement is a positive sign. The overall message is clear: stability and clarity are essential to support healthy, long-term capital allocation in the UK.” 

• Opinium surveyed 1,000 UK investors between 12 and 17 November.