Twice as many Gen Z are investing than Boomers

An annual study of 2,000 adults found 47 per cent of those born after 1996 have invested their money this last year, compared with just 17 per cent of those in their 60s and 70s.

Millennials aren’t far behind, with 46 per cent investing in the past 12 months. Together, the two younger generations are driving a new culture of investing in the UK and far outpacing Gen X, where just 27 per cent are growing their money this way.

The research was commissioned by Moneybox as part of its Investing Money Mindsets index which tracks attitudes towards investing across the UK. It shows appetite to invest is increasing, with the proportion of people holding Stocks and Shares ISAs rising from 20 per cent in 2023 to 26 per cent 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 per cent to 17 per cent, over the same two-year period.

Such steady growth may be driven by rising confidence levels, with 83 per cent of Gen Z and 81 per cent of Millennials saying they feel more confident investing than they did a year ago. That compares with 45 per cent of Gen X and just 27 per cent of Boomers.

Brian Byrnes, director of personal finance at the savings and investment platform, said: “It’s clear that the idea of investing still feels daunting to many people. It can seem complex or risky and it’s therefore no surprise that when uncertainty takes hold and the focus becomes protecting what you already have.

“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.

Moneybox’s findings come after a report from Barclays published in September, which estimated that 15 million UK adults are holding more than £610 billion of “possible investments” in surplus cash savings that risks losing value over time due to inflation.

Brian added: “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,"

“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.”

With Generation X and Boomers contributing on average 13 per cent of their income to saving and investing each month, compared to the 22 per cent and 20 per cent of Gen Z and Millennials respectively, the research suggests this hesitation could be closely linked to lower financial confidence and greater day-to-day spending pressures.

In fact, nearly half of Gen X (48 per cent) and Boomers (47 per cent) say they are struggling with the cost of living while 48 per cent of Gen X also feel they are not earning enough to invest. A third of Baby Boomers (33 per cent) say that unexpected costs have dented their financial optimism, according to the research conducted by OnePoll.

Brian Byrnes from Moneybox added: “Building long-term wealth is a gradual process – much like Rome, it isn’t built in a day. 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.

"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.”