Gen Z investors drive shift from saving to investing, Vanguard finds
Vanguard’s British Money Mindset Report found 37% of Gen Z investors started investing within the past 2 years, contributing £25bn in new investor inflows.
A new wave of younger investors, led by Gen Z, is driving a shift in the UK from saving to investing, according to Vanguard.
Vanguard’s inaugural British Money Mindset Report found more than a third of Gen Z investors, at 37%, took their first step into investing within the past 2 years. Vanguard said this was equivalent to almost 780,000 people and had contributed £25bn in new investor inflows.
The findings were unveiled at an event held in partnership with Spotify and Goalhanger.
Based on a nationally representative survey, the research found Gen Z investors were a key driver of the 1.5m people, or 11%, who became first-time investors in the past 2 years.
The report also highlighted differences in how people start investing. One third of Gen Z investors, at 33%, chose crypto as their first investment, compared with 9% of Gen X investors and 2% of those aged 62 and over.
Vanguard said the findings underlined the need for the industry to provide clearer guidance and support on long-term, diversified investing and lower-risk options, helping people distinguish between long-term wealth building and more speculative forms of investing.
Older generations were more likely to start with established products. Among Gen X investors, 29% started with shares and 22% with investment funds, while among those aged 62 and over, 36% started with shares and 22% with investment funds.
The research also found significant momentum among people who have not yet invested. More than 2 thirds of savers currently on the sidelines, at 68%, said they planned to start investing within the next 2 years.
This intention was strongest among younger groups, with 91% of Gen Z and 84% of Millennials saying they wanted to get started.
However, confidence remains a barrier. Vanguard found 70% of non-investors lacked confidence in their investment knowledge and cited this as a barrier, while 58% felt under-informed and unsure how to get started.
Ben Summers, head of Vanguard for the UK, said: “The most striking finding from this research is not just that more people are investing, but that millions more are on the cusp of taking their first step.
“That’s incredibly encouraging, particularly among younger generations. But as more people begin their investing journey, it’s vital they build the right foundations.
“Our research shows many younger investors are starting with higher-risk assets such as crypto, reinforcing the importance of helping people understand the value of discipline, diversification and a long-term approach.
“There is still a clear gap between intention and action. Too many people still feel under-informed or lack confidence in their investment knowledge, despite recognising the benefits investing can bring.
“As champions of the long-term interests of investors, we see a significant opportunity to help people build the confidence to get started in the right kind of way, turning curiosity into action that supports better long-term financial outcomes.”
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