Uptick in young people opening stocks and shares Isas
A growing number of people in their 20s and 30s are choosing to invest their savings.
17th July 2020 13:58
by Tom Bailey from interactive investor
A growing number of people in their 20s and 30s are choosing to invest their savings.
An investment boom among millennials is gathering pace, according to research by Scottish Friendly Society.
Through analysing the HMRC Isa data, Scottish Friendly Society found a growing number of people in their 20s and 30s are choosing to invest their savings.
The data showed that the number people classed as either millennials or Generation Z subscribing to a stocks and shares Isa leapt by 92.3%, going from 131,000 to 252,000 between the 2016/17 and 2017/18 tax years.
Under 25s were the fastest growing demographic opening stocks and shares Isas subscriptions. In the 2016/17 tax year, just 22,000 under 25s opened stocks and shares Isas. In the following year that number had risen to 66,000.
Those aged between 25-34 saw the second fastest growth of stocks and shares Isa subscriptions, growing by 71% from 109,000 to 186,000 between the 2016/17 and 2017/18 tax years.
Kevin Brown, savings specialist at Scottish Friendly, says: “It is very encouraging to see so many young people engaging with money and investing, many of whom are probably dabbling with the stock market for the first time.
“What these figures show is that investing is not just for older people with higher incomes and more savings; it can be for anyone and everyone who wants to grow their money over the long-term.”
Despite the uptick in millennials opening stocks and shares Isas, there has been an overall notable fall in the number of Isas being used for investments. Figures for the 2018-19 tax year show the number subscribing to stocks and shares Isa subscriptions fell by 450,000 compared to a year prior.
As a result, the number of adult Isas that are being used just for cash savings now stands at 76% of all adult Isa subscriptions. In comparison, cash savings Isa subscriptions accounted for 70% in 2017-18.
The increase comes despite the cash Isa largely becoming redundant and worthwhile only for wealthy savers since the introduction of the Personal Savings Allowance in April 2016. The allowance enables basic rate taxpayers to receive £1,000 of cash interest tax-free each year (£500 for higher rate taxpayers and £0 for additional rate taxpayers).
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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