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Women, Generation Z and Millennials are leading a push in investing, with UK investors outperforming the rest of Europe as people seek higher returns on their savings.
While finances remain tight for many across the country, some 3.5 million have decided to invest in the UK alone in the past year, and a total of 11 million have started investing in Europe generally, according to research by BlackRock.
The increase in investment has been driven by a rise in the number of younger people committing their money to the financial markets, with 30 per cent more people aged 25 to 34 starting to invest in the last 12 months.
Women drive growth: there has been a 32% increase in the number of female investors in the UK in the last year
In the rest of Europe, there has been an increase of only 13 percent among people aged 25 to 34.
The number of people in the UK aged 18 to 25 starting to invest grew by 16 per cent.
As a result of the rise among younger people, Generation Z and Millennial investors make up just under a third, or 28 per cent, of UK investors.
Next year, BlackRock said it expects 66 percent of first-time investors to come from these two generations.
In addition to the rise in younger investors, there has been a 32 per cent increase in the number of female investors in the UK over the past year.
In comparison, there has been an increase of only 11 percent across Europe.
According to BlackRock forecasts, more than half (51 per cent) of new UK investors will be women in the next 12 months.
“Investment platforms and banks that also offer digital access are tapping into a new pool of money,” says Timo Toenges, head of digital wealth at BlackRock.
“These models dispel the belief that investing must be complex and is not for people without deep experience.”
BlackRock drew its conclusions from a survey of 36,730 people across Europe.
ETFs are proving to be a popular way to invest
As the number of investors continues to grow, many are choosing to use exchange-traded funds, or ETFs, to enter the market.
These were first introduced over 30 years ago, and the first UK ETF to track the FTSE 100 was launched in 2000.
ETFs have gained popularity in recent years due to how easy they are to access through online platforms, while a growing number of thematic trackers have given investors a wide variety of options.
ETFs, like other stocks, can be bought and sold on stock exchanges, but they track a variety of assets, rather than a single company. These inexpensive investments can be a good way for investors to diversify their portfolios.
Toenges said: ‘ETFs are a great way for people to start their investment journey as they are easy to understand, transparent and carry low fees. Millions of people across Europe have turned to ETFs.
“Digital platforms position ETFs front and center for first-time investors.”
In the last 12 months, the UK has seen a 57 per cent increase in ETF ownership, the highest in Europe.
The majority of these investors, around 87 percent, use digital investment platforms to trade ETFs, rather than meeting with an advisor, independent or not. Only 11 percent said they would consult an adviser at their bank, compared to 21 percent in the rest of Europe.
For comparison, only 44 percent of Europeans choose to access their investments through an online platform.
Digital platforms are a big part of what has made investing much more accessible in recent years. However, around 70 per cent of people in the UK who don’t invest said they don’t have enough money to do so, and 65 per cent in Europe say the same.
In part, this is also due to a lack of financial education: 54 percent of the youngest cohort, ages 18 to 24, report that they don’t understand investing or don’t know enough to get started.
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