The younger generation are more interested in investing in 2022 than older peers, according to new research by abrdn, but they are focused more on trendy investments such as cryptocurrencies.
Around 69% of participants aged 18-24 wanted to invest this year, the study of 2,000 people found, compared to 38% of over 45s, with more than a third (39%) of young people already invested in cryptocurrencies.
The Financial Conduct Authority is trying to regulate the market, which can be dangerous for investors. This was highlighted last year by Squid, the crypto based on the Korean Netflix drama Squid Game, which disappeared after $3.4m (£2.5m) was invested.
An estimated £140m was lost to crypto fraud between January to October last year according to Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Streeter said: “Its unregulated nature has meant that far too many vulnerable consumers have lost money as a result.”
This move to cryptocurrencies is at odds with the rise of ethical and environmental, social and governance investing, which has risen in recent years.
Crypto mining produces masses of carbon and uses more energy than the population of Finland, not to mention the large number of scams plaguing the market.
Yet making a positive impact was an important factor in 53% of the participant’s investments, with 32% saying they would be willing to receive lower returns for holdings they care about.
This consideration for an investment’s impact reflects a trend in favour of sustainable portfolios. Ethical, social and governance (ESG) funds made record inflows of £1.5bn in November 2021 and accounted for 53% of net inflows the year before.
The survey also confirmed that fewer women want to invest than their male equivalents, with a third of the female respondents wanting to invest this year, versus 56% of men.
Though this seems low, it is higher than the current 28% of adult women in the UK that currently invest.
Overall, 55% of respondents wanted to invest their money in 2022. In real world figures, abrdn predicted this could equate to 19 million UK adults, although 38%of people surveyed stated that not having enough money was a concern for them.
It also found that 36% were sceptical of the risks involved with investing and 24% assumed it was only accessible to wealthy people.
Jonny Black, Strategic Director at abrdn, said: “It is a positive sign that many are willing to invest their money if they had a better understanding of the process and wider effects.
“However, often perceived barriers – like needing to have a lot of money or it being too high risk – are still preventing people from investing in a brighter future.”
Many households have accumulated cash throughout the crisis and now find themselves wealthier than they were prior to it, according to the Invesco Multi Asset Team. They predict that people will “gain the confidence to spend and invest more” as markets stabilise