Money is a taboo topic for many across the UK, with Brits more likely to discuss politics and current affairs (50%) than money and finances (29%) at the dinner table, according to new research from the Investment Association.
When it comes to investing, even fewer conversations are taking place. Despite better financial education in secondary schools (33%) recognised as the most effective way to get more people in the UK investing, just 1% of survey respondents have talked about investing with a teacher or educator.
Over half (52%) of those surveyed wouldn’t speak about investing with anyone and women (58%) are more likely to avoid investing conversations than men (47%).
This means that many people across the UK are missing out on important conversations about money and getting started with investing.
Gen Z speak up
The research revealed a positive trend amongst younger generations when it comes to money conversations. Gen Z (42%) and Millennials (37%) are almost twice as likely to talk about money and finances at the dinner table than Gen X (23%) and Baby Boomers (21%).
Additionally, nearly a third (28%) of Gen Z investors sought advice from friends when they first started investing, compared to less than a fifth (16%) of Gen X and just 1 in 10 (10%) Baby Boomers.
Social media also plays a significant role for younger generations, with almost a third (29%) of Gen Z investors turning to these platforms for investment information. Amongst those not currently investing, 1 in 5 (20%) Gen Z would look to social media channels to help them get started, compared to fewer than 1 in 10 Millennials (8%).
Conversation doesn’t equal confidence
Despite their openness, younger generations still struggle with financial confidence. Almost a third of Gen Z (31%) and Millennials (28%) report feeling uncertain about managing their current wealth.
To add to their financial concerns, over a quarter (27%) of Gen Z and a third (31%) of Millennials expect to or have already received a lump sum of money as a gift or inheritance.
Across the generations, however, those that invest are more confident about managing their current wealth than non-investors (80% vs. 71%).
There is more that must be done to build knowledge and financial resilience from a young age and empower people with the confidence to invest and make informed financial decisions. When asked what changes or improvements in financial education would encourage more people to invest, more financial education in secondary schools (33%), making it easy to start investing little and often (27%) and simpler investment products (22%) came out on top. Yet shockingly, just 1% of adults report talking about investing with teachers or educators.
Miranda Seath, Director of Market Insight at the Investment Association, commented:
“Whilst it’s really encouraging to see that younger people are leading the charge on money conversations, both discussing financial affairs with friends and family and looking to social media for information, a lack of confidence persists when it comes to investing and managing finances. With a significant intergenerational wealth transfer in motion, it has never been more important to help people make good financial decisions.
“It is our job to help them turn talk into action. Starting your investment journey early in life means more opportunities to reap the benefits of long-term growth and build financial resilience. However, younger investors currently do not have the same access to structured guidance or advice as older generations to support them to make well-informed choices.
“Across different generations, better financial education in schools was recognised as key to getting more people investing in the UK. The investment management industry has pledged to increase the number of people holding an investment product from just over 20% of the UK population to 75% over the next decade – matching the number who hold a cash savings account today. We need to create a culture of inclusive investment, where talking about money isn’t taboo and where young people can find structured guidance and targeted support to help them make better decisions. Smart financial decisions to invest for your future can make a significant different to peoples’ lives by helping them fund education, buy a house and live a comfortable life in retirement.”
Sarah Wallace, Director, Just Finance Foundation, commented:
“Too many young people are growing up without the knowledge or confidence to make financial choices that align with their personal circumstances, values and aspirations. And that starts with the fact that money is still a taboo subject in our society. At JFF, we know that starting financial education early and creating a safe space for money talk can make a big difference to financial wellbeing and inclusion. But we also understand that talking about money is difficult and families can’t do it alone. We need to support schools, communities and the financial services sector to help prioritise financial education, build trust and ensure every young person has access to this vital learning.”
