UK investors pull £601m from UK equity funds in August

What the August data shows

UK investors withdrew a net £315m from equity funds in August 2026, according to the latest Fund Flow Index from Calastone. This marks the 14th month of outflows in the past 15, with total equity withdrawals since June 2025 now reaching £15.16bn.

The outflow was concentrated in UK equity funds, which lost £601m. European equity funds saw £145m leave, specialist sector funds lost £52m, and North American funds recorded a net outflow of £3m, their first since November 2025. The August figure was significantly lower than July's £1.61bn outflow, suggesting a slowdown in the pace of selling.

Where the money is going instead

Bond funds attracted £407m in August, marking a fourth consecutive month of inflows and broadly in line with their 12-month average. Money market funds took in £364m, double their average monthly inflow and the largest since November 2025.

A money market fund invests in short-term, high-quality debt instruments such as Treasury bills and commercial paper. It aims to preserve capital and provide liquidity, but unlike a cash savings account or a cash ISA, it is not covered by the Financial Services Compensation Scheme. Investors should be aware of this distinction when considering where to hold their cash.

Why UK equity funds keep losing assets

The persistent outflows from UK equity funds are part of a longer-term trend. Calastone reported that £54.3bn was withdrawn from UK equity funds over the decade to the end of 2025, with ten consecutive years of net selling, despite the FTSE 100 rising 21.5% in 2025.

Calastone attributes the recent caution to speculation ahead of the Autumn Budget, which has made investors hesitant to commit new money to equities. The firm notes that uncertainty around potential tax changes is weighing on sentiment. Budget-related coverage, including the wealth tax and capital gains tax discussion, is collected under Latest news and Money guides.

Budget-related coverage, including the wealth tax and capital gains tax discussion, is collected under Latest news and Money guides.

What it means for ISA and pension savers

Fund flows describe the aggregate behaviour of investors, not the performance of the funds themselves. An outflow does not necessarily mean a fund has lost value; it simply means more money was redeemed than invested during the period.

For savers, the stocks and shares ISA allowance for 2026-27 is £20,000, as confirmed on GOV.UK. This allowance is shared between cash ISAs and stocks and shares ISAs, meaning savers can split their contributions across both types within the same annual limit. Within an ISA or pension, investors can switch between different fund types, such as moving from an equity fund to a money market fund, without triggering a tax event. However, the specific rules and any associated charges will depend on the provider.

What to watch next

The Investment Association is due to publish its monthly fund statistics later in the month, which will provide a second data source on fund flows. Meanwhile, the Bank of England's Monetary Policy Committee is scheduled to announce its decision on 17 September 2026, and the date of the Autumn Budget is yet to be confirmed. Calastone has linked investor sentiment to these events, so any surprises could influence flows in the coming months.

Frequently asked questions

How much money left UK equity funds in August 2026?

According to Calastone's Fund Flow Index, UK equity funds saw a net outflow of £601m in August 2026. This was part of a broader trend, with total equity fund outflows reaching £315m for the month. The UK equity fund outflow was the largest among regional categories, followed by European funds at £145m and specialist sector funds at £52m.

What is the Calastone Fund Flow Index?

The Calastone Fund Flow Index is a monthly measure of net retail fund flows in the UK, based on transactions processed through Calastone's platform. It tracks buying and selling activity across a wide range of funds, providing insight into investor sentiment and asset allocation trends. The index is compiled from actual transaction data, making it a reliable indicator of how UK investors are moving their money.

Why are investors moving into money market funds?

Investors have been moving into money market funds, which attracted £364m in August 2026, double their 12-month average. This shift is often driven by a desire for safety and liquidity, especially during periods of economic uncertainty. Money market funds invest in short-term, high-quality debt and aim to preserve capital, making them an alternative to cash savings accounts, though they are not protected by the Financial Services Compensation Scheme.

What is the difference between fund outflows and fund performance?

Fund outflows refer to the net amount of money withdrawn from a fund by investors, while fund performance measures the change in the value of the fund's assets due to market movements. A fund can experience outflows even if its performance is positive, as investors may sell for various reasons such as rebalancing or risk aversion. Conversely, a fund can see inflows during a period of poor performance. Both metrics are important but provide different information.

How much can be paid into an ISA in 2026-27?

The annual ISA allowance for the 2026-27 tax year is £20,000. This limit applies to the total amount that can be paid into all types of ISAs, including cash ISAs, stocks and shares ISAs, and innovative finance ISAs. Savers can choose to split their allowance across different ISA types, but the total contribution across all ISAs cannot exceed £20,000 in a single tax year.