Confidence among retail investors in the UK is improving amid a strong start to the year for the FTSE 100, with home bias to domestic markets increasing, according to data from J.P. Morgan Personal Investing.

Its analysis found that 66 per cent of UK retail investors felt confident about the prospects of positive investment returns in 2026.

This represented an 8 percentage point increase from 2025, when just 58 per cent of UK investors were confident of positive returns in financial markets.

“UK investor confidence has turned a corner with more retail investors feeling bullish about positive returns this year,” said J.P. Morgan Personal Investing chief investment officer, James McManus.

“Coming off the back of a volatile year for markets, UK investors are increasingly focusing on building resilient, diversified investment portfolios that can weather market surprises and benefit from global opportunities.

“With the government’s industry-wide retail investor campaign kicking off soon, this growing investor optimism is a positive sign and could also be a catalyst for spurring on the next generation of UK investors in 2026.”

Its research highlighted that UK investors planned to increase their exposure to domestic markets, despite already high levels of home bias in the country.

Of those investing in equities this year, 72 per cent of retail investors said they planned to invest in UK markets, up from 66 per cent last year.

Among those who did not plan to invest in the UK market this year, 27 per cent wanted to see more growth opportunities and stronger performance in the domestic market before investing.

Although there were concerns regarding an artificial intelligence (AI) bubble forming in US equity markets, appetite for US stocks remained fairly stable, with 47 per cent planning to invest in US markets in 2026, down by 1 percentage point year-on-year.

J.P. Morgan Personal Investing noted that investors with portfolios totalling more than £100,000 in assets were especially confident about US markets, with 52 per cent planning to invest in US equities this year.

UK retail investors’ appetite for investment risk has also increased, with 55 per cent saying they had a medium-to-high investment risk appetite, up from 49 per cent last year.

The research highlighted that portfolio risk levels among investors could increase in 2026, as 22 per cent of investors were planning to increase their investment risk over the coming year.

“UK investors aren’t opposed to home comforts,” said McManus. “A strong majority are looking to UK equity markets this year for steady returns from the listed banking, energy, and mining giants as well as the household brands that make up the UK indexes.

“Investors will be buoyed by the positive start to the year with the FTSE 100 being lifted above the 10,000 mark for the first time ever, adding to this momentum.

“While UK equity markets have performed well recently, returns have been dwarfed by other markets like the US over the long-term which have delivered higher returns off the back of an emerging ‘golden age’ for AI and tech companies.

“It is encouraging to see investors taking a global approach to the investments so that their investment portfolios are diversified and can benefit from market gains wherever they may appear.”

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