40% of 18-24 year olds and 39% of students succeed in saving cash, but seem reluctant to invest.
A lack of understanding about potential investment returns means they may be missing out, as informal advice from friends and family forms the cornerstone of financial guidance for 18-24-year olds and students.
Equiniti believes employers should do more to support employees with independent financial advice.
A survey conducted with Equiniti and YouGov has revealed that the youngest members of society, including those still at University, are saving for their future but are shying away from other investments.
Around two-fifths of 18-24 year olds and full-time students hold cash savings, while 12% of 18-24 year olds contribute to either a personal or workplace pension. The research shows that, despite concerns over tuition fees and shrinking real wages, young millennials are still saving in the early stages of their career.
However, longer-term investments, which may provide greater returns, are not seeing the same level of take-up from this group. Just 5% of this younger demographic invest in stocks and shares, 12 percentage points lower than all Brits.
There is concern that the youngest in society are not getting the advice they need to make sensible financial decisions, as they instead stash their money away in low-interest ISAs and other savings accounts.
Of those asked where they would be most likely to seek advice on their savings and investments, over a fifth (23%) of 18-24 year olds and over a third (36%) of full-time students said that they would consult either friends or family. The likelihood of high fees could well be deterring the youngest from seeking independent advice; just 9% saying they would seek some form of professional guidance compared to over a fifth of people aged over 35.
Equiniti advocates the role of employers in early education of personal money management and encourages support for those gaining financial independence to acquire this knowledge. Employers who work to increase engagement through SAYE programmes and benefits portals will help employees develop longer-term investment strategies and gain real profit from savings.
Paul Matthews, CEO of EQ Boardroom, Equiniti, commented:
“The last election has shown that the younger generations are as politically engaged as ever and this research shows that they are also taking responsibility for their finances. However, like all investors, they are finding reliable sources of information and guidance hard to come by. There is an opportunity here for employers to engage on a meaningful level with the future leaders of their businesses and help them make good financial decisions.”
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Notes to Editor:
Equiniti is a specialist outsourcer delivering technology-enabled solutions to some of the best known brands and public sector organisations in the UK, including c.70 of the companies in the FTSE 100. It is the UK’s leading provider of share registration and associated investor services, and also has market leading positions in administration of employee share plans, pension administration and software, and employee benefit schemes. Equiniti's services, which are delivered by over 4,300 employees, benefit 28 million people in the UK and 120 countries around the world. Equiniti’s industry-leading standard was officially recognised at Shares Awards 2017, winning the Best Share Registrar and Best Investor Education categories.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2040 adults.
Fieldwork was undertaken between 5th - 6th April 2017. The survey was carried out online. The
figures have been weighted and are representative of all GB adults (aged 18+).