Record low interest rates push UK savers into stocks and shares According to figures from the Office for National Statistics (ONS), the proportion of UK-listed shares owned by retail investors increased in 2010 for the first time in seven years and by the largest amount since 1994. At the end of 2010, the general public held 11.5pc of shares in issue, compared with 10.2pc in 2008 - the last time the ONS compiled the data. British Gas's famous "Tell Sid" adverts of 1986 may have spurred 1.5m members of the public into buying shares when it was privatised, but the compelling factor this time was the Bank of England's decision to slash interest rates to a historic low of 0.5pc and print £325bn to stave off an even deeper recession. The ONS noted that the reversal of a trend that began in the 1960s, when the British public owned 54pc of the stock market, "may reflect the relative strength of equities as an alternative investment compared with low interest rate returns on savings." According to Ben Yearsley, an investment manager at Hargreaves Lansdown, there was no doubt as to the motivation. "Rates are now so low that investors feel they have to do something other than just sit on their cash," he said. The FTSE 100 is yielding about 3.6pc and income funds about 4pc. That's double the income you'll get if the money's left in the bank. People have been prepared to take the risk to get a better return. The value of household stock market investments rose by £87bn to £205bn between 2008 and 2010 - a 74pc increase but below the £290bn at the peak of the dotcom bubble in 2000. Given that the value of all UK equities over the same period rose 53pc to £1.78 trillion, the figures suggest that either British households are particularly good stock pickers or they ploughed more of their savings into the market. Almost a third of the £205bn was invested outside the FTSE 100. Despite the sharp increase, the proportion of the stock market owned by retail investors remains lower than in 2006 and is the second lowest on record - putting paid to Margaret Thatcher's dream of creating a shareholder democracy. In 1990, a fifth of UK stocks were in the public's hands and in 2000 it was still 16pc. Insurance companies and pension funds sold off equities between 2008 and 2010 - reducing their share of the market from 26.2pc to just 13.7pc in what is thought to have been a flight to safety. Foreign investors owned 41.2pc of UK stocks in 2010, compared with 41.5pc in 2008, with the US and Europe accounting for 84pc of that.