New research published by Euroclear’s UK CSD, Euroclear UK & International in collaboration with Thinks Insight & Strategy reveals that about 4.7 million people in the UK are still holding paper share certificates.
The research follows the July publication of the Digitisation Taskforce’s final report, which recommended the removal of paper share certificates by 2027 in favour of fully digitised shareholdings.
While the UK government has accepted the recommendations, the research findings reveal that the UK risks falling behind unless urgent steps are taken to support the transition and reach those still holding paper shares.
The research highlights that the majority of paper shareholders are not opposed to digitisation:
• 24% of paper shareholders did not identify a single benefit of holding physical certificates
• Only 8% cite better access to voting rights as a reason to hold them
• Just 20% cite avoiding broker fees
• 33% of paper shareholders received them as a gift or inheritance
• 52% purchased paper shares directly, but those aged 55+ are more likely to have purchased directly than younger age groups
• 75% reported a positive experience of converting shares from paper to digital
However, with only a third of paper shareholders saying they will dematerialise ahead of the 2027 deadline, the real challenge is overcoming inertia for the majority.
The much-anticipated publication of the Final Report marked a major milestone in the UK’s journey to modernise its capital markets. It sets out a staged approach to digitisation, culminating in a fully intermediated digital shareholding system. This will benefit issuing companies and investors through reduced costs, more streamlined operations, and enable the UK’s shareholding infrastructure to better integrate with the demands of today’s financial market as well as those of the future.
Digitisation also offers other major advantages for the UK’s capital markets. Today, around 99% of the share capital of FTSE350 companies already resides in the Central Securities Depository. Consolidating all shareholdings into a unitary register will remove duplicative processes and improve communication between issuers and investors which is foundational to better governance and increased investor participation.
Furthermore, the Swedish example highlights the opportunity to boost retail investment. In Sweden, where Digital ID and a fully digital shareholding model have been in place for several decades, households hold 40% of their assets in shares, nearly four times the UK level of 11%. Ultimately, modernised shareholding structures make it easier for everyone to invest, helping to democratise investment and support the growth of deeper, more inclusive capital markets.
Chris Elms CEO, Euroclear UK & International said: “The research shows that paper shareholding generally isn’t about investor preference, but largely a case of inertia. Most simply haven’t gotten around to digitising or don’t know how to.
With very few citing lower costs as a reason to hold paper shares, it also suggests that brokers and investing platforms are democratising access to investing and making it cheaper and easier for everyone. This is something that must be celebrated as we move to a modern shareholding framework in line with the Digitisation Taskforce’s recommendations.
With clear guidance, transparency on costs, and assisted onboarding, the transition can be as smooth and successful as the move to online banking.”
Carol McNaughton Nicholls, Managing Partner at Thinks Insight & Strategy, said: “This research provides a very timely and much-needed update on the number of paper shareholders there are in the UK.
For the government and the City to launch an effective campaign to digitise paper shares and get more people investing in UK capital markets, they need to know more about the people they are trying to reach. By delving into the characteristics of those who hold paper shares, as well as what the perceived benefits of paper certificates are - or lack thereof - this research should serve as a useful resource to those at the centre of this initiative.”
About the research
Research conducted by Thinks Insight & Strategy was conducted in two stages:
• A nationally representative omnibus survey of 2,000 UK adults
• A dedicated survey of 510 paper shareholders (current or within the past 3 years)