Those between the ages of 25 and 34 were most bullish about personal finances and investment, according to a survey by Nutmeg
The pandemic has created a new generation of investors in their late 20s and early 30s looking to do more with their money, according to a study by online investment management service Nutmeg.
It looked into shifts in attitudes and behaviours towards money management and investment as a result of the health crisis.
The survey which covered 2,000 adults across the UK last month, found that those between the ages of 25 and 34 were most bullish about personal finances and investment, with a big appetite for ethical investing.
Last year, 42% of all new investors joining Nutmeg’s platform were from the 25-34 age group, a 58% rise from 2019. From an ethical investment standpoint, the number of new investors in general choosing socially responsible investment portfolios in 2020 doubled year-on-year (YOY).
Six in 10 people aged 25-34 have put more money in investments over the last year, compared with 38% of the population, with another notable interest from this group in stock picking.
As the spike in the Do It Yourself (DIY) investor emerges, 21% of young investors are more likely to make and manage investments for themselves since the start of the pandemic.
The research found that 22% were also much more likely to invest in specific companies they see or hear about.
The recent surge in stocks such as GameStop and AMC Entertainment linked to the WallStreetBets page of chat forum Reddit has already highlighted the new power and weight of retail investors in the market.
These “meme-stocks” saw a dramatic surge at the end of January amid a trading war between amateur investors and Wall Street professionals who were shorting the stocks. This left Wall Street institutions losing billions of dollars.
A string of trading platforms, including Robinhood, eventually stopped users from investing any further in a number of companies for a short time after a spike in volatility. The buying ban sparked a furious backlash on social media platforms.
Nutmeg’s data further showed that 43% of people aged 25-34 felt financially better off now than a year ago, compared to 29% of people overall.
Around 45% of millennials said they currently felt more confident about their finances than before the pandemic.
For adults across the UK, the top financial priority in the wake of the pandemic was feeling financially stable (52%), while a third (33%) cited ‘creating savings for life’s unforeseen events and emergencies’ as their key money focus in light of the pandemic.
James McManus, chief investment officer at Nutmeg, said: The COVID pandemic has caused financial difficulties for many people across the UK, but it’s pleasantly surprising to see the extent to which many young adults look set to emerge from the pandemic in a stronger financial position, and how much financial attitudes have been changed by the pandemic.
He said that given millennials represent the largest age group in the UK, after baby boomers, these shifts in behaviour and attitudes towards investing are particularly significant and represent a huge opportunity for wealth creation – at both an individual and national level.