Nearly five decades after the City’s “Big Bang” modernised financial markets, a surprisingly analogue relic endures: paper share certificates. According to new research by Euroclear UK & International and Thinks Insight & Strategy, roughly 9% of British adults, some 4.7m people, still clutch physical certificates, despite plans to abolish them by 2027.
The study, published following the government-backed Digitisation Taskforce’s final report in July, finds that only a third of paper shareholders intend to digitise their holdings before the deadline. A quarter cannot name a single benefit of holding paper, suggesting that resistance to reform stems less from conviction than from inertia.
The government has accepted the taskforce’s recommendations to replace paper certificates with fully electronic shareholdings, a move intended to modernise the UK’s creaking ownership infrastructure. Digitisation promises lower costs, better governance, and easier shareholder participation. Yet the report suggests that unless the transition is actively managed, millions of investors, many elderly, and many unaware of the need to act, risk being left behind.
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For most investors, nostalgia is not the reason they cling to paper. Only 8% cite easier voting rights as an advantage, and just 20% mention avoiding broker fees. A third inherited their certificates or received them as gifts, while over half bought them directly, typically those aged over 55.
Some 75% of those who have converted from paper to digital report a positive experience. The obstacle, it seems, is simply the effort required to make the change.
UK shareholding structure remains fragmented
The implications reach beyond administration. The UK’s shareholding structure remains fragmented between the digital and paper realms. Around 99% of the share capital of FTSE 350 companies already sits within the Central Securities Depository (CSD). Bringing the remaining holdings into the same system would create a unified register, improving communication between issuers and investors and simplifying corporate actions such as voting, dividends, and rights issues.
Other countries offer a glimpse of what might follow. Sweden, which embraced digital shareholding decades ago, now has one of the highest levels of retail participation in equity markets. Households there hold roughly 40% of their assets in shares, compared with just 11% in Britain. Advocates argue that a fully digital system not only reduces administrative burdens but also encourages investment by making it easier and cheaper to own shares directly.
Euroclear, which operates the UK’s CSD, argues that digitisation will help “democratise investing”, an appealing goal in a country where retail investors remain underrepresented. But it also warns that the transition must be carefully managed. Many paper shareholders, it notes, are unaware of how to convert or assume it will be costly. In fact, modern brokers and investing platforms have made share ownership cheaper and more accessible than ever. The challenge is one of communication, not conviction.
Education is essential to meet government targets
To ensure a smooth transition, policymakers will need to pair deadlines with guidance and support. Assisted onboarding, akin to the education campaigns that accompanied the shift to online banking, may help overcome hesitation. The government’s ambitions for deeper, more inclusive capital markets depend on it.
Britain’s long attachment to paper share certificates may appear quaint. Yet the persistence of such outdated mechanisms is a reminder that financial modernisation requires more than new systems; it requires habits to change too. The 2027 deadline is now only two years away. If inertia wins, the UK risks discovering that even in the digital age, paper still carries weight.
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