The steep rise in stock markets since March hides a fundamental lack of confidence among investors, reveals a new poll by Prudential, the UK-based retail financial services company.

According to the survey of 2,000 UK adults, one in four potential investors are ruling out stock market investments because of a lack of confidence in equities or because they do not want to lose more money.

While the FTSE 100 index of UK shares has risen from its March trough of 3,512 points to over 5,000, investors are still extremely reticent. Prudential warned that a lack of investment in the short term will rule out strong long-term returns.

“The saying that it is not timing the markets but time in the markets that matters could never be more apt. Investors often act irrationally and driven by fear they sit out the markets as they begin to recover, missing out on some spectacular gains,” said Trevor Cheal, Prudential’s retirement savings business director.

According to the survey, 12 per cent of respondents have no confidence in the stock market over the next year and eight per cent say they have no confidence in the stock market at all.

However, among those who did not want to invest right now, 32 per cent would be convinced to do so if they could be guaranteed they would not lose money while 13 per cent say they will invest if the market shows strong signs of recovery. An additional 6 per cent would invest if they had access to expert advice.

Of those who reject stock market investments, 25 per cent say there is nothing that could convince them to return.