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2022 Gen Z Investment Report

The Royal Mint reveals that young people are set to invest £9.4 billion as alcohol, travel and fast fashion take a back seat.

  • The Royal Mint’s Gen Z Investment Report reveals young people are set to invest £9.4 billion* during the 2022/2023 financial year.
  • Two fifths say the pandemic brought to light the value of having secure finances and as a result, over a third have taken it upon themselves to learn about investing as a way of helping grow their money.
  • The majority of those surveyed have experienced loss of money through NFTs, meme stocks and crypto and are therefore exploring how gold could stabilise an otherwise volatile investment portfolio.
  • The Royal Mint’s DigiGold offering is a cost-effective way to own precious metals from as little as £25, making it simple for investors to diversify their portfolio.

The Royal Mint’s 2022 Gen Z Investment Report has revealed the overwhelming majority (80%) of 16- to 25-year-olds now dedicate a portion of their income to investing in their future, with £9.4 billion set to be invested during the upcoming financial year. Building financial confidence has become prominent amongst the younger generation with two fifths (40%) stating the pandemic brought to light the value of having secure finances, leading over a third (34%) to take it upon themselves to learn about investing as a way of helping grow their money.

 

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Current Investment Habits

Social media platforms such as Instagram and TikTok have witnessed a rise in Finfluencers (Financial Influencers) who aim to educate the younger generation on investment options. With almost a quarter (23%) of Gen Z now seeing people they follow on social media posting about money they made through investing, it's easy to understand how meme stocks, NFTs and cryptocurrency have gained popularity.

This social media boom has, however, caused 17% of those surveyed to adopt a ‘get rich quick’ mentality with people expecting to double or triple what they had invested within a short space of time. These high-risk methods often mean that money is lost rather than gained.

Nearly two thirds (64%) of 16- to 25-year-olds now say that having experienced this loss, they are actively looking to diversify their risk by adding what they believe are ‘safer investments’, such as gold, to their portfolio, with the majority (69%^) considering investing in precious metals. Top motivations to do so include precious metals’ history of consistent growth (24%^) and reputation for holding their value over time (37%^).

Of those investing, 44% say they’re able to allocate money into safeguarding their future due to cutting down on eating out (88%), long haul travel (67%), lessening their alcohol intake (39%) and buying fast fashion (35%).

1. Travel

Over the past year, long haul travel was substituted by more affordable staycations, saving 55% of young adults up to £500. Over a fifth (21%) say they are keeping hold of this money-saving mentality, choosing to explore places closer to home instead of extravagant trips abroad. More than a quarter (26%) even say they have a newfound appreciation for exploring the Great British outdoors and will not catch any flights this year, helping both the environment and their pockets.

For those who wish to travel affordably, working from home and digital nomad culture has seen 36% head to countries of close proximity with similar time zones to work whilst enjoying new scenery. This means that almost a fifth (19%) aren’t needing to take unpaid leave to explore, leaving their income undisrupted.

2. Socialising

Entertaining friends and family at home rose in popularity during the pandemic and many have maintained this habit. A huge 73% say it’s saved them up to £500 the past year. When opting to dine out however, many (39%) are choosing to refrain from, or lessen, their alcohol intake due to a rise in the ‘sober curiosity’ trend - saving another £295 per year.

3. Fast fashion

In addition, people are deciding not to shop for a new outfit for every occasion, saving almost a fifth (19%) over £500 the past 12 months. When they do treat themselves, 35% are choosing to boycott fast fashion and are instead opting to support local charity shops or independently owned boutiques - saving both a pretty penny and the environment.

 

Table One: Top areas where Gen Z are cutting back on spending to invest instead.

1. Eating Out (46%)
2. Ordering takeaways (42%)
3. Lessening or giving up alcohol intake (39%)
4. Buying fast fashion (35%)
5. Leisure activities e.g. cinema (27%)
6. Beauty treatments (26%)
7. Travel (21%)
8. Home improvements (19%)
 

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Planning ahead

Planning for the future is front of mind for many Gen Zs as a quarter (24%) say that investing allows them to feel less anxious about their financial future.

Of those with children, or planning to have children, almost a third (29%) say that safeguarding their kids’ future is of utmost importance to them. The Royal Mint’s Little Treasures service is the ideal way to ensure your children have financial security for moments such as university or buying their first home.

Proving to be a very financially savvy generation, the majority (57%) of 16–25-year-olds choose to invest up to £200 of their monthly income. Crypto comes out as the top investment (38%) the younger generation is making; however, they are looking to diversify their portfolio with stable investments such as gold due to crypto’s volatility (15%) and not proving to be sustainable in the long term (20%).

Commenting on the report, Andrew Dickey, Divisional Director of Precious Metals at The Royal Mint said: “Young adults are becoming increasingly confident investors, and this is exciting to witness. Although new means of investing such as NFTs and meme stocks seem appealing, more traditional methods such as precious metals can be a great way to add more ‘safe haven’ assets to a portfolio, helping with diversification.”

The Royal Mint - the home of gold in the UK - has seen record sales of physical and digital gold in 2021**. The company now offers a wide range of physical and digital gold investment products, including DigiGold, which enables investors to buy fractional gold online.

 

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Sources:

  • The survey was conducted by Censuswide 01.03.2022 - 04.03.2022, on behalf of The Royal Mint including 1,014 Gen Z (16-25 years) (minimum of 500 who have invested in some way in the past year).

  • *80% (Number of young people planning to invest in the next year as per data conducted 03.2022 - 04.03.2022) of 6,792,000 16-24 year olds (Source: ONS) = 5,433,600 x £1,728 (the average amount those surveyed plan to invest next year (£144 x 12)) = £9,389,260,800

  • ^ Survey data from Censuswide 19.08.2021 - 23.08.2021, on behalf of The Royal Mint including a general population of 2,287 of which included 1,171 millennials (24 – 42 years) and Gen Z (16 – 23 years).

    **The Royal Mint had a 40% increase in revenue terms across the whole of the business in the total amount of gold sold compared to 2020.

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