Young adults driving culture of investing in UK as confidence grows | Personal Finance | Finance

Generation Z and Millennials are driving a new culture of investing in the UK, with the younger generations putting their cash to work for the future at more than double the rate of Baby Boomers, a new study reveals. An annual survey of 2,000 adults found that 47% of Gen Z (born after 1996) invested money over the last year, compared with just 17% of those in their 60s and 70s (Baby Boomers). Millennials are close behind, with 46% having invested in the past 12 months. Together, they are far outpacing Gen X, where only 27% are growing their money through investments.

The research, commissioned by Moneybox for its Investing Money Mindsets index, indicates a growing appetite to invest, with the proportion of people holding Stocks and Shares ISAs rising from 20% in 2023 to 26% by the end of last year.

This momentum looks set to continue, as the number of people setting goals to invest more also increased, from 12% to 17%, over the same two-year period.

This momentum is supported by a significant boost in confidence. Eighty two percent of Gen Z and 81% of Millennials feel more confident investing than they did a year ago. In contrast, only 45% of Gen X and 27% of Boomers reported a similar increase.

However, despite the positive trend among younger people, Brian Byrnes, director of personal finance at the savings and investment platform, notes that investing still feels « daunting » to many, particularly in times of economic uncertainty.

“Cash may feel safe, but if you already have an easily accessible emergency fund in place, relying on cash savings after this point is unlikely to be the best way to achieve your long-term financial goals,” he explained.

It comes as a Barclays report from September estimated that 15 million UK adults are holding more than £610 billion of “possible investments” in surplus cash savings, which risks losing value over time due to inflation.

“Investing has been historically shown to provide better long-term returns, helping people grow their money over time rather than seeing the value of cash savings eroded by inflation, which remains stubbornly high at the moment, » Brian added.

The research suggests that the hesitation among older generations is closely linked to lower financial confidence and greater day-to-day spending pressures.

Gen X and Boomers contribute an average of 13% of their income to saving and investing each month, compared to 22% for Gen Z and 20% for Millennials. Nearly half of Gen X (48%) and Boomers (47%) report struggling with the cost of living, while 48% of Gen X also feel they are not earning enough to invest.

A third of Baby Boomers (33%) say that unexpected costs have also dented their financial optimism.

Brian Byrnes concluded: “I want to get the message out that it’s never too late to start investing. You don’t need everything to be perfectly lined up before you begin, familiarity grows through experience.”

“For too long, getting financial advice has been costly and out of reach for many, and most people have not known where to turn to for high quality guidance and support, » he added.

« But technological innovation, alongside important industry developments such as the Advice Guidance Boundary Review, means providers like Moneybox can now help close that gap. It’s vital we build on this momentum and make investing more accessible, supportive and less intimidating for everyone.”