Investors in the West Midlands under the age of 35 are much more likely to take a ‘hands-on’ approach to their wealth compared to older generations, according to a survey of over 1,000 UK savers and 500 High Net Worth Individuals commissioned by Rathbone Investment Management.
Over half (54%) of investors in the West Midlands aged between 18 and 34 have taken steps to protect or safeguard their savings as a result of recent economic uncertainty; in comparison, just 40% of investors aged over 45 had done the same.
Rising inflation, historically low interest rates, and the ongoing Brexit negotiations have contributed to an atmosphere of heightened economic uncertainty in the past year, and today’s research shows some striking differences in how the different generations are navigating these choppy waters. Indeed, 19% of 18-34 year olds had diversified their portfolio amidst uncertainty, and almost a quarter (23%) had personally reviewed their portfolio.
Part of the reason for younger generations being more involved in their own finances may be because a higher proportion have generated their money themselves, rather than inheriting it from previous generations. According to the research, 14% of 18-34 year olds in the West Midlands had made their money through owning and running – or subsequently selling – a business. This is less than the over 45s, with 9% saying this was the case. Another potential factor for the younger generations being more actively involved in their approach is that they have grown up in very different economic times.
Rathbone’s research also revealed that younger generations were more likely to use their money for good than older generations. 10% of 18-34 year olds believe social impact investing is one of the best ways to use your money for good, compared to just 5% of over 45s.
Ian Tansley, Regional Director of Rathbones’ Birmingham office comments: “Younger generations – particularly millennials – have grown up during times of prolonged economic uncertainty, so it’s perhaps unsurprising that they are taking a hands-on approach to their finances.”
“Typically, it’s assumed that younger generations are less financially astute, but our research suggests that this is not the case. The start-up boom and rise of entrepreneurship in the UK means that younger generations are now much more clued up on their investments, and how best to protect and grow them.
“Higher inflation and the current economic uncertainty over Brexit mean that investors should be taking steps to ensure their portfolio can weather any storm as well as possible. A large part of this will be making sure that portfolios are well diversified.”
