Nearly one in four UK investors reduce exposure to domestic stocks as political uncertainty reaches record high

• Political uncertainty reaches its highest level since IG began tracking investor sentiment, with 61% of investors citing it as a key concern
• Nearly four in five (78%) investors expect political uncertainty to negatively impact UK markets or increase volatility

Political uncertainty is beginning to influence how UK retail investors position their portfolios, with almost one in four (23%) saying they have changed their investment allocation as a result, according to investing and trading platform IG‘s latest biannual Client Sentiment Study.

Among those who have repositioned, the most common response has been to shift investments from UK markets into international markets (42%), while 19% have increased their cash holdings.

The research reveals that concern about political uncertainty has climbed to its highest level since IG began tracking investor sentiment in 2022. More than six in ten (61%) investors now cite domestic political uncertainty as a key risk to their portfolios – up 11 percentage points from just six months ago.

Further highlighting the impact on market sentiment, almost four in five investors (78%) believe ongoing political uncertainty will either negatively affect UK stock market performance or increase market volatility over the coming months.

Geopolitical tensions compound investor concerns

Domestic political uncertainty is also being compounded by a more challenging global backdrop. Geopolitical conflict has become the single biggest concern for UK investors, with 69% citing wars and international tensions as a risk to their investments, up sharply from 51% six months ago.

As geopolitical risks have intensified, investors have also become more concerned about the knock-on effects for the global economy. Concern about inflation has risen to 53% (up from 44%), while worries over high interest rates have increased significantly to 38%, compared with 18% six months ago.

Table 1: Investors’ top concerns compared with six months ago

Chris Beauchamp, Chief Market Analyst UK at IG, said: “Our latest research suggests political uncertainty is beginning to influence investor behaviour, not just investor sentiment. Rather than simply expressing concern about the outlook, many retail investors are actively reassessing where they want their money invested.

“It’s also important to view these findings in the wider context. Investors are navigating uncertainty on multiple fronts – from domestic politics to escalating geopolitical tensions and persistent inflationary pressures. Together, these factors are creating a more cautious investment environment.

“That doesn’t necessarily mean investors are abandoning risk altogether. Many continue to look for long-term growth opportunities, but confidence in UK markets will depend on greater political and economic certainty over the months ahead.”

Notes 

The IG Group Client Sentiment Study is a bi-annual study to understand clients’ sentiment, confidence, concerns as well as outlook on their financial goals, ambitions, financial markets, portfolio performance and future trading intentions.

Survey fieldwork dates: 9th-23rd June 2026

Methodology: 10-12 minute online survey sent to active IG retail clients on a 6 monthly basis to track investor sentiment. This tracker launched in January 2022.

Sample: IG clients that placed a trade in the last 6 months – the survey was sent to active leverage and share dealing clients – the results are split based on their preferred account.

Survey Base Sizes: Total sample June ’26 wave – c. 1,800 UK Clients

Clients’ top concerns regarding portfolio performance: respondents were asked to select all which apply to them from the five options in the graph above, plus Government debt (36%), Higher taxes (35%), Policy changes / government intervention (e.g. windfall tax on energy companies) (34%), Supply chain disruptions (31%), Corporate earnings impacted by NI hike (16%), High corporate taxes (16%), Banking crises (12%), and Labour shortages (9%). Additionally, 5% of respondents selected “No, I am not concerned”.

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