Younger generations in the UK demonstrate a significantly stronger appetite for investing compared to older age groups, according to research commissioned by wealth management platform Stratiphy.
The study found that 47 per cent of adults aged 18 to 34 invested money in the last 12 months, compared to 23 per cent of those aged over 55.
The research suggests younger investors are looking for ways to generate returns in a challenging economic climate marked by inflation and low interest rates on cash savings. This trend extends to future intentions, with only 29 per cent of the younger cohort stating they have no plans to invest in the next year, compared to two-thirds (66 per cent) of those aged over 55.
Perceptions of risk also differ notably between generations. While 68 per cent of over 55s reported feeling more comfortable saving in cash rather than investing, this figure dropped to 56 per cent for 18 to 34 year olds. Furthermore, over half (55 per cent) of the younger group believe cash savings are as risky as investments due to the potential for inflation to erode returns, a view shared by only 33 per cent of those over 55.
Investor knowledge gap and platform solutions
Despite a higher appetite for investing, the research indicates that many younger individuals feel ill-equipped to manage their own investments. Nearly six in 10 (56 per cent) of those aged 18 to 34 admitted they do not believe they have a strong enough financial understanding to do so effectively. This compares to 46 per cent of respondents in the over 55 age group.
This confidence gap is also reflected in past experiences. The study found that 56 per cent of investors aged 18 to 34 have previously actively managed their investment portfolio but felt they lacked sufficient insight to make informed decisions, compared to 27 per cent of investors aged over 55.
Stratiphy, which commissioned the research, has launched a platform designed to provide individual investors with access to personalised and AI-powered investment strategies. The platform aims to address the knowledge gap identified in the survey by offering tools typically used by investment professionals, such as back-testing and investment automation.
Daniel Gold, CEO and founder of Stratiphy, commented: “Millions of young people are shunning poor value cash savings in favour of investing in order to beat inflation and secure higher returns. Whilst their parents may be more risk averse as they approach retirement and favour cash savings over potentially superior yields from investments, Gen Z and millennials have time on their side to ride out market fluctuations and a strong appetite to maximise their future returns.”
Gold also added: “Faced with a growing cost of living crisis and a widening advice gap, it is vital that younger investors have access to simple wealth management tools that offer the personalisation and insights needed to empower them to take control over their portfolios and future wealth.”
