The 1980s in Britain was the decade of big privatisations. The Prime Minister, Margaret Thatcher, wanted to create a class of share-owning members of the public – her 1985 Conservative party conference speech imagined a society “where owning shares is as common as having a car”.
Her government denationalised state-owned utilities such as British Telecom (1984), British Gas (1986) and the electricity and water companies, as well as corporations such as Rolls-Royce and British Airways. The public were encouraged to buy into these share issues for a relatively small sum. “If you see Sid, tell him” was the advertising tagline for the British Gas privatisation that targeted the first-time small investor.
But Thatcher’s dream didn’t come to fruition. Not in the way she expressed it at least, although in a broader sense the 2020s Sid is much more dependent on the stock market than his 1980s predecessor.
We can see how the story evolved by looking at TGI data held within AMSR.
The short-term impact was dramatic, as we see below. Share ownership, which had been constant at around 7% of the UK adult population, trebled to 22% by 1988. In any given year previously the percentage acquiring shares for the first time was below 1%; this leapt to 7.5%. But by the early 1990s, soon after her departure from office, this expansion had stagnated (see graph).
Why was this? The stock market crash of autumn 1987 was a major correction – it took three years for the market to regain its previous level. This may have acted as a warning and put people off. And no doubt some new investors simply took the profit once the assets increased in value. Such short-termism, encouraged by the cheap pricing of the sell-offs, wasn’t what Thatcher had in mind.
Source: Kantar TGI
Looking at the longer-term trend (below) we see a second peak around the turn of the century, driven perhaps by market changes in the early days of the internet. By 2002, share ownership stood at 25%, among whom 4% owned shares in the company for which they worked. The numbers buying into managed and diversified funds such as Unit Trusts and Investment Trusts had also increased, meaning that 30% held some form of direct market-based investment.
But over the last 20 years such investments have declined. By 2022, only 18% had market-based holdings and only 14% held individual share portfolios.
Source: Kantar TGI
In parallel however the provision of pensions has evolved. As final salary schemes become more rare, private pensions are increasingly taking their place.
And so large numbers are invested in the stock market, albeit often via their pensions. Thus they have an indirect interest and dependency on market valuations, even when not actively engaged with their investments. Few now have individual company shareholdings, but experts would argue that managed funds offer more diversification and less risk.
So Margaret Thatcher’s dream didn’t come to pass, at least not in the way she envisaged. At 14% in 2022, individualshare ownership stands at barely half of its early 1990s peak. And 68% of us are car owners.
TGI (Target Group Index) is a continuous survey which has been carried out in Great Britain since 1969, based on 25,000 adults per annum, who provide information on their use of all major products, brands and services. Attitudinal, demographic and media exposure data are also included. Kantar, who own and operate the TGI, are making major donations of data to AMSR.
To explore the TGI archive within AMSR, click here.
Contributed by Geoff Wicken
Date posted: 22nd September 2024.