Nationwide: Younger generations less likely to consider investing in property

Jake Carter

April 23, 2021

Nationwide house prices

Younger generations are less likely to consider investing in property, despite a higher portion investing, according to Nationwide Building Society.

An estimated 39% of younger generations are likely to consider investing in property, compared to the average of 42%.

However, 86% of those aged between 16-24s with at least £1,000 in savings have invested, while 79% of the general population have invested.

Over a third (38%) of those in Gen-Z are prepared to take high risks to increase the chance of rewards, a factor which significantly tapers with age.

Across all age groups, 12% of the population class their investment risk appetite as high.

Looking at portfolio splits, the most popular investments are stocks and shares ISA (48%), property (42%) and other ISAs (40%).

Investments in gold (26%), crypto-currency (22%), and alternative investments such as wine (10%) and antiques (9%) fell down the list.

Despite this, Gen-Z are more interested in crypto (28%) and wine (14%) when compared to the average, classed traditionally as more unusual investments.

According to the lender, Gen-Z’s believe returns will come considerably quicker than their older counterparts, with 40% expecting to wait between one and two years before they start making strong returns.

The average UK saver surveyed believes they will start to see decent returns on their investments after their money has been locked away between five and nine years (40%), although one in five (20%) expect to see strong returns between just one and two years.

This is perhaps why nearly two thirds (62%) of Gen-Z’s would be put off from investing if they had to lock their money away for five years.

Nationwide found that there were a number of significant barriers that stopped many.

Half were concerned about losing money (49%), over two fifths (43%) simply consider investing too risky and around a quarter (24%) did not have enough money to invest.

Education and knowledge about investments also remains a barrier, with a further quarter (25%) stating that they simply did not know where to start.

For Gen-Z, not knowing where to begin was found to be a much greater issue, with close to half (46%) saying they were not confident about starting their investment journey because they did not have enough knowledge to proceed, while those aged 16-24 are also most likely (76%) to require help and guidance with investments.

They are also most aware that investing is a potentially risky endeavour (83%).

When looking at reasons for beginning investing, age differences were stark once again.

Overall, the reason UK savers surveyed cited most was saving for retirement (32%), followed by seeing the success of others (24%), following the recommendations of family or friends (22%) and having time for it thanks to COVID-19 (19%).

Those in Gen-Z over-indexed in the beginning due to seeing the success of other investors (35%), being recommended by family or friends (30%) and doing so because of more time on their hands (30%).

For those looking for more advice on starting their journey, their bank or building society was the logical starting point for most (38%), followed by friends and family (33%), with 30% preferring to look online and do it themselves.

Jason Hurwood, director of protection, investments and insurance at Nationwide Building Society, said: “Over the course of the pandemic, investing has remained a popular topic that’s rarely been out of the news, whether it’s the rise in interest of cryptocurrencies, or the GME stock fluctuations.

“Whilst it’s encouraging to see that younger generations are getting involved in investing, it’s important that, no matter your age, the risks are fully understood before you part with any of your hard-earned money. Getting it wrong may turn a Hollywood dream into a financial nightmare.

“With some of the newer products on the market, you can go from sign-up to investing rapidly, and in many cases it’s easy to get confused, especially if it’s something that’s new to you.

“Nationwide’s investment platform is designed to cater to all levels of investor, whether you’re just starting out and need some guidance, or if you’re an experienced investor who knows exactly what you want.”

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