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Millennials and Gen Z discover the attractions of the exchange : INVESTMENT

Official numbers show huge growth in the number of people in their twenties and thirties who subscribe to an ISA for stocks and shares. The number of millennials and Generation Z investing in ISAs grew by an astonishing 92% in just one year.

Millennials and Generation Z investors, people in their twenties and early thirties, are increasingly opting for an investment on the stock exchange. This is shown by an analysis of the official HMRC data, carried out by Insurance and Investment Mutual Scottish Friendly.

In an apparent investment boom among young people, the number of generation Zers and Millennials subscribing to an ISA for stocks and shares increased by 92.3% from 131,000 to 252,000 between tax years 2016/17 and 2017/18.

Scottish Friendly’s analysis of HMRC’s latest annual ISA data shows that under 25 year olds are the fastest growing population in terms of ISA subscriptions for stocks and shares, followed by 25 to 34 year olds.

In the 2016/17 tax year, only 22,000 under 25 year olds subscribed to a Stocks & Shares ISA, compared to 66,000 the following year – an impressive increase of 200%.

This number continues to increase if one also takes into account the number of under-25s with a Stocks & Shares ISA and a Cash ISA, who increased by 138% in the same period from 13,000 to 31,000.

In addition, the number of people aged 25 to 34 who have subscribed to an ISA for shares and shares increased by 71% from 109,000 to 186,000 between tax years 2016/17 and 2017/18.

In comparison, the number of people aged 35 to 44 and over 65 years of age who have subscribed to an ISA for shares and shares increased by only 4% and 5%, respectively, in the same period.

Conversely, the number of people aged 45-54 and 55-64 who subscribe to an ISA for stocks and shares actually decreased over the course of the year.

While the absolute number of savers with Stocks & Shares ISAs increases with age, it is clear that these savings and investment instruments are becoming more popular among younger people than before. For example, 649,000 people over 65 subscribed to a Stocks & Shares ISA in 2017/18, compared to 252,000 under 35 years.

Number of people who have subscribed to an ISA for shares and shares by age between 2016/17 and 2017/18:

Tax year 2016/17 Tax year 2017/18 % increase decrease
Under 25 22,000 66,000 200%
Age 25-34 109,000 186,000 71%
Age 35-44 305,000 311,000 2%
Age 45-54 560,000 540,000 -4%
Age 55-64 575,000 573,000 -0.3%
65 years and older 633,000 649,000 3%
total 2,204,000 2,324,000 5%

Source: HMRC ISA statistics released June 25, 2020

Number of people who subscribed to both a Stocks & Shares ISA and a Cash ISA between 2016/17 and 2017/18:

Tax year 2016/17 Tax year 2017/18 % increase decrease
Under 25 13,000 31,000 138%
Age 25-34 54,000 90,000 67%
Age 35-44 57,000 92,000 61%
Age 45-54 92,000 122,000 33%
Age 55-64 97,000 118,000 22%
65 years and older 73,000 91,000 25%
total 385,000 544,000 41%

Source: HMRC ISA statistics released June 25, 2020

Kevin Brown, savings specialist at Scottish Friendly, says: “It is very encouraging to see that so many young people are investing and investing in money, many of whom are probably dealing with the stock market for the first time.

“These numbers show that investments are not just for older people with higher incomes and more savings. It can be for anyone and everyone who wants to increase their money in the long term.

“The introduction of the Lifetime ISA, which gives subscribers a 25% increase in government savings, is at least partially responsible for increasing the number of under-35s seeking to invest.

“But the increase in options for novice investors or for younger people who want to invest but want to keep their costs down has also clearly helped.

“These two reasons together mean that it is now easier and cheaper for young people to invest in their future than ever before.

“Of course, investing can be daunting, especially if you are doing it for the first time. That is completely understandable.

“If you think like this, you might invest small amounts first until you feel more comfortable. If you do this, you can gradually increase the amount you invest over time. “

“Of course, history doesn’t give us any certainty about making future decisions, and you have to remember that the value of investments can go down as well as up and you can get back less than you paid.”

* Tax treatment depends on individual circumstances that may change in the future.

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