Young people are more aware of cryptocurrencies as an investment option according to research1 by the Association of Investment Companies (AIC) among non-investors between 20 and 40 years of age.
Seven in ten young people (70%) are aware of cryptocurrencies such as bitcoin, ranking well ahead of stocks and individual stocks (59%), premium bonds (49%), bonds (43%), mutual funds (23%). forex (21%), investment funds (18%) and investments through crowdfunding platforms (also 18%), according to research carried out by Research in Finance.
Lack of understanding: feeling wary, worried and confused...
Young people say the biggest barrier to investing is their lack of understanding and knowledge (57%). He cost of living crisis is the second biggest obstacle to investing (53%), followed by not having enough money in general to start investing (45%), being worried about the markets or the economy right now (39%) and being worried about investing in is generally too risky (30%).
Given these barriers to investing, it is not surprising that young people describe their emotions around investing as cautious (54%), concerned (41%), confused (39%) and stressed (25%). The two positive emotions identified by non-investors were interested (43%) and enthusiastic (16%) โ although only 12% of women were excited compared to 32% of men.
Annabel Brodie-Smith, Director of Communications for the Association of Investment Firms (AIC), said: โSome of us may find it shocking that young people are more aware of cryptocurrencies as an investment option. But it shows that the investment industry needs to do more to help young people understand the range of investment options, the risks involved, and how investing can help them save for the future.
โLack of knowledge is the biggest barrier for young people to invest, but the cost of living crisis is close behind. Clearly these are challenging economic times and an increase in salary is the key catalyst to encourage people to invest with the help of a financial advisor secondarily.
โIt's really encouraging that young people want to know more about investing. We need to help them by giving them clear information that is easy to understand online and on social media.โ
Investing Opinions: "Glorified Gambling"
When asked to describe their views on investing, young investors' concerns about risk come out strongly, especially in the context of a stagnant economy.
One investor said: "It's like a glorified game, you put money into a stock without knowing if it will go up or down and you could even lose that money forever if it goes bankrupt."
Another commented: โGiven the state of the world right now, I feel uncomfortable investing, it's too risky, my dad has already lost a big total on his pension.โ
But they are eager to know more.
However, just over four-fifths (81%) of young people are interested in learning more about how to invest now or in the near future. Just over a third (34%) of all respondents have considered investing but don't feel confident enough to start.
When asked what would encourage them to start investing, a Salary increase (58%) and help of a financial adviser (46%) were the most important catalysts. To win the lottery ranked third (43%), followed by a recommendation from someone they know, like family or friends (41%), more information in long-term investment benefits (38%) and inherit money (33%).
Where do young people go for information about money and finances?
Not surprisingly, most young people search online for information about money and finances. Googling or a online search is by far the most popular way to get more information (40% of respondents), along with instagram (19%), Youtube (18%), websites overall (13%), Facebook (13%), Twitter (8%), Tik Tok (8%), LinkedIn (4%) and Reddit (4%).
speaking to friends and family is also popular. More than a quarter of those surveyed (28%) go to friends For information about money and finances, 20% ask their parents23% go to other family members and 7% examine their colleagues.
Traditional media it still has a role for young people investigating money and finance. Just over a fifth (22%) of those surveyed read the finance sections of newspapers and the same proportion (22%) read books.
For more information on how to invest with investment companies, visit theaic.co.uk/learn-more
