80% of Gen Z Already Actively Investing for the Future

The Royal Mint has shone a spotlight on the investment habits of Gen Z individuals. Within its ‘Gen Z Investment Report’, it revealed that 80% of 16-to-25-year-olds are ring-fencing money to invest in their futures. In fact, during the next financial year, the Gen Z demographic is set to invest upwards of £9.4 billion.

The majority (57%) of Gen Z individuals surveyed as part of the Gen Z Investment Report manage to save up to £200 monthly. This equates to almost £2,500 a year, which is no mean feat for the next generation that’s being hit by rising living costs and the difficulties of getting on the British property ladder.

What does Gen Z view as the most attractive investment assets?

Interestingly, precious commodities like gold have attracted significant interest from Gen Z investors. 15% of all investments made by young investors in the last year were in gold. It seems savvy Gen Z savers still recognize the value of storing wealth in precious metals, particularly in periods of economic and political instability. Even those with a general investment account can invest in gold, with a host of exchange-traded funds (ETFs) such as the L&G Gold Mining ETF tracking the performance of the leading gold mining stocks around the globe.

Who does Gen Z trust for investment advice?

Perhaps the biggest issue to come out of the Royal Mint’s Gen Z Investment Report is the number of young adults that lean heavily on financial influencers, known as ‘finfluencers’. These people exist on social media and will attempt to promote certain meme stocks like GameStop or AMC Entertainment as well as investment strategies, most of which will be published without so much as a disclaimer. Almost a quarter (23%) of Gen Z investors follow finfluencers, who could be direct to unregulated investment ideas.

The changing attitudes to spending among Gen Z

Aside from the approach of young adults to saving for the future, the Gen Z Investment Report also provided a fascinating insight into the spending of those aged 16 to 25. The vast majority (88%) surveyed confirmed they are slashing their everyday outgoings by reducing visits to restaurants and takeaway outlets. More than two-thirds (67%) also said they are taking fewer trips out to reduce public transport and fuel costs. Meanwhile, a further 39% said they have decided to cut down on their alcohol intake to save money.

One of the primary drivers of these changing habits is Covid-19. The pandemic has changed the financial outlook of many within the Gen Z demographic. 40% of respondents admitted the pandemic was a realization of the need for secure finances. In addition, more than a third (34%) said the pandemic encouraged them to invest time and energy in learning more about sensible investing.

The ease of accessibility to the financial markets is another main reason why the Gen Z demographic has taken to investing so well. Stocks and shares ISAs and general investing accounts can now be accessed via smartphones and native apps, making it easier to monitor returns and make changes to investment portfolios.

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