Cookie Policy

We use cookies on our website and have placed these on your computer. By continuing to use our website you consent to this. For more information, including how to change your cookie settings and to disable our non-essential Google Analytics cookies, please refer to our Cookie Policy. If you do not wish to be reminded of this on each visit, please use the close button.

Move over millennials - What generation Z knows about money

November 2017


Tags: First Time Investors

Some financial companies are already marketing to Generation Z, the children and teens who will make up the next wave of consumers.

Made up of those born after 2000, Generation Z will be huge. According to Pew Research, it will make up 40 per cent of the US workforce by 2020 - making Gen Z a bigger part of the workforce than either Millennials or Baby Boomers.

Statistics show that Gen Z is an entirely new beast. They’re abstemious (with smoking and alcohol use among young people in the UK at its lowest levels since records began), uber-connected (they spend three hours on average a day online), and sad (levels of depression and anxiety are very high amongst this generation of young people).

But what will this generation know about money, and how can their families help them to save?

 

1. Fintech will be king for Gen Z

For Generation Z, there’s an app for everything, and children and teens who have grown up with smartphones are unlikely to see the point of going into a bank branch. Even the youngest members of Generation Z are growing up with Fintech, with prepaid cards with associated apps, such as GoHenry, Osper and Nimbl, targeted at children as young as eight, allowing them to tag their spending and to see where their money goes. As a result, they may be more willing to invest using computer algorithms as they get older, with research showing that younger people are far more likely to trust robo advice than the older generation.

The parents of Generation Z would be wise to use technology to help their children and teens to understand money, rather than fearing it.

 

2. Generation Z are financially savvy

A survey from the Money Advice Service should overjoy the parents of Gen Z who are hoping that their children will want to keep them in their old age.  Nearly all of Gen Z children (95 per cent) agree that it’s important to learn money management skills, and most said they put money away for a rainy day. Another survey showed that over 80 per cent already have a bank account, with over half of those aged 17-19 using banking apps three times a week.

They’re also cautious, with survey showing they fear debt and already planning for retirement.

 

3. Generation Z care about sustainability

Sustainable investing is still seen as a niche product, but Generation Z may be the ones who make it mainstream. Research from Masdar, a future energy company in Abu Dhabi, shows that post-millennials  in 20 countries name climate change a bigger threat than the economy, terrorism or poverty and inequality. And 84 per cent of them expect more investment into renewable energy, with 59 per cent wanting to make sustainability a career choice.

Sustainable funds may become a more popular choice when individuals like this take the reins of their own finances.

It will be a while before Gen Z takes the financial reins, but savvy investors could start heeding the signs now. Demand for app-based Fintech and sustainable funds looks set to rise, while we could be preparing ourselves for the arrival of the most financially savvy generation yet. For those of us who are Gen Z’s parents, it’s a comforting thought.

Our short video explains why a Stocks and Shares ISA is like a music playlist.

 

Log in to your account 

Sign up for a Stocks and Shares ISA

You can start investing today through any of our account options:

Dealing Account

Access a wide range of global investments in this flexible, unrestricted account.

Find out more

Stocks and Shares ISA

Take advantage of tax free investing with our Stocks and Shares ISA today.

Find out more

Self-Invested Personal Pension (SIPP)

From great value to best-in-class, access the SIPP to suit your needs through our extensive network of providers.

Find out more

I've still got questions!

We’re on hand to help at our Customer Experience Centre on 0345 0700 720

Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.

The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.

If you have a Stocks and Shares ISA, make sure you get the best value for your investments. We are ranked top for price on large portfolios (Platforum, 2018).

Open an account today and we’ll cover any transfer fees up to £100.*

*T&Cs apply.

Open a Stocks & Shares ISA

Find out more