Historically, the UK has had a cautious relationship with investing:
- Aberdeen reports that out of the G7 countries, the UK has the lowest retail investment levels.
- According to DIY Investor (based on an IG study), 3 in 5 UK savers avoid investing because they believe it’s too risky.
But this trend isn’t fazing Gen Z.
37% of Gen Z took their first step into investing in the last two years, contributing a total of £25 billion in investor inflows, Money Marketing reports. What’s more, 91% of Gen Z state they plan to start investing by 2028.
According to the Guardian, the Gen Z investing boom has been driven by various reasons, including:
- Economic uncertainty
- Online investing culture
- Lower barriers to entry than previous generations.
While eager, Gen Z aren’t perfect.
Keep reading to learn the dos and don’ts of Zoomer investing.
4 Gen Z investing lessons worth knowing
1. Investing earlier gives your wealth more time to grow
The longer you invest for, the more opportunity your wealth has to gain value.
According to Barclays, if you had invested £20,000 in global equities in 2006, it would have been worth £123,660 by the end of 2025.
Gen Z begin investing at age 19 on average, according to Morningstar (based on data from the 2024 Modern Wealth Survey). By comparison, baby boomers waited until age 35 on average before beginning their investing journey.
So, if a 19-year-old woman invests today, this means her wealth could benefit from 70 years of investment gains and compound growth, based on ONS average life expectancy data.
While not everyone can invest at 19, borrowing this Gen Z eagerness and investing earlier (albeit with the right strategy) can help you achieve financial freedom sooner.
2. Consistent investing is a healthy habit to adopt
Barclays research reveals that Gen Z investors regularly top up their portfolios 12 times a year, equal to one contribution a month. They are more consistent than millennials, Gen X, and baby boomers.
Only 1% of Gen Z say they haven’t added anything to their investments in the past 12 months.
It’s difficult to develop a habit. According to the University of Surrey, it can take anywhere between 18 and 254 days.
Yet consistency is key when it comes to investing – regular contributions help you build steady, secure wealth over time and make you more likely to achieve your financial goals.
You can encourage your regular investing habit by setting up automatic contributions.
3. Try not to overestimate your financial literacy
According to Barclays, 31% of Gen Z adults claim that their understanding of investing terminology is high.
In reality, 61% of Gen Z demonstrate poor financial literacy – the worst of any generation.
Confidence is important. But knowledge of key investing principles protects you from making costly mistakes.
For example, an understanding of risk can help you align your investments more accurately with your tolerance and expectations. Likewise, if you are prepared for market volatility, you’ll be less likely to harm your long-term objectives by selling your investments in response to short-term market setbacks.
You can speak to your financial planner, who can help you learn investing principles so that you feel more confident.
4. Chasing trends rarely pays off
Investing trends, popularised on social media platforms, are becoming more widespread and influencing investor behaviour.
As the social media generation, Gen Z are more susceptible to these trends. Therefore, it’s no surprise that, according to Yahoo Finance, over 70% of Gen Z investors hold a third of their portfolio in cryptocurrency.
Cryptocurrency is frequently cited as one of, if not the most, volatile investments. In fact, another Yahoo Finance report states that seven of the largest bitcoin crashes in history have seen the asset value drop by at least 50% each time, to as low as 99%.
Trends like crypto promise high risk and high reward, with the potential to turn a £1,000 investment into £10,000 overnight.
However, most people who invest in crypto lose money overall.
While trends are exciting to participate in, you are more likely to invest successfully by betting on market growth as a whole and staying invested for the long term.
Speak to your financial planner, who can help you create an investment portfolio suited to your desired level of risk, investing time frame, and goals.
Get in touch
Gen Z can teach us much about investing. But these lessons are no substitute for professional advice.
If you’d like investing guidance, speak to a member of our team today.
Email us at [email protected], or call 01273 076 587.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Cryptoassets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws and are not suitable for the majority of investors.
