The current upturn in the UK stock market is said to be being driven ‘ordinary’ householders buying shares because they are sick of the poor interest rates attached to their savings account.

The FTSE 100 index was pushed up 3.2 percent last week. This has followed a six month rally that has driven blue-chip shares up 50 percent over their March low.

Experts believe that both of these rallies are in part due to ordinary buyers, that is buyers who are not represented by big investment firms. Since June, the number of these buyers has risen to levels equal to the dotcom boom of 2000, and in the last three months, deals placed through execution-only stockbrokers has risen to over 4 million.

Experts have said that although the big firms still do the majority of share trades, at present it is all the small investors who are actually driving growth in the markets.

Many people have turned away from traditional savings accounts because of the very low interest rates currently on offer. With uncertainty in the property market, there is also wariness over investing in property. Thus, with many believing that shares and the FTSE can only go up in the next few years, ordinary householders are turning to the stock market to help make some money.

However some experts are concerned that many of these new investors may get their fingers burnt. Many are predicting an Autumn correction and some believe that the market is overpriced and dividends are under pressure and likely to fall. The issue with falling prices is that with a savings account, the capital is never lost whereas there is a risk with stocks and shares investments that the capital invested may be lost.

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