A new wave of younger investors, led by Gen Z, is driving a shift in the UK from saving to investing. Vanguard’s inaugural British Money Mindset Report reveals that more than a third (37%) of Gen Z investors – equivalent to almost 780,000 people – took their first step into investing within the past two years, contributing £25 billion in new investor inflows. The findings were unveiled at an event held in partnership with Spotify and Goalhanger.
Crypto appetite highlights need for stronger guidance and support
Based on a nationally representative survey, the research shows that Gen Z investors are a key driver of the 1.5 million people (11%) who became first-time investors in the past two years.
The research also highlights important differences in how people choose to start investing. One third (33%) of Gen Z investors chose crypto as their first investment, highlighting the importance of the industry continuing to provide clear guidance and support on the principles of long-term, diversified investing and the benefits of lower-risk options. This guidance will help people distinguish between long-term wealth building and more speculative forms of investing.
This contrasts with older generations, where crypto adoption as a first investment is far lower (9% Gen X; 2% aged 62+), and where investors are more likely to start with established products such as shares (29% and 36% respectively) and investment funds (22% across both cohorts).
The research also points to significant momentum yet to come. More than two-thirds (68%) of savers currently on the sidelines plan to start investing within the next two years. This intention is particularly pronounced among younger cohorts, with 91% of Gen Z and 84% of Millennials wanting to get going.
Momentum is building, but confidence remains a key barrier
Millions of people are now actively considering investing, yet confidence continues to hold many back, with 70% lacking confidence in their investment knowledge and citing this as a barrier, and 58% of non-investors feeling under-informed and unsure how to get started.
“The most striking finding from this research is not just that more people are investing, but that millions more are on the cusp of taking their first step. That’s incredibly encouraging, particularly among younger generations. But as more people begin their investing journey, it’s vital they build the right foundations. Our research shows many younger investors are starting with higher-risk assets such as crypto, reinforcing the importance of helping people understand the value of discipline, diversification and a long-term approach.
“There is still a clear gap between intention and action. Too many people still feel under-informed or lack confidence in their investment knowledge, despite recognising the benefits investing can bring. As champions of the long-term interests of investors, we see a significant opportunity to help people build the confidence to get started in the right kind of way, turning curiosity into action that supports better long-term financial outcomes.”
Ben Summers, head of Vanguard for the UK
Vanguard to launch Targeted Support Service to help close the ‘confidence gap’
To help more people take their first step into investing, Vanguard will soon launch a targeted support service for first-time investors. Offering simpler guidance, tailored journeys and practical support, the service aims to close the ‘confidence gap’ that can hold people back from getting started. Vanguard has also identified a set of ‘unlocks’– based on the research findings and investors’ experiences – to help both individuals and the wider industry encourage more people to start investing:
| Barrier | Misconception | Industry unlock | Individual unlock |
| Investing feels unfamiliar (“Favouring the Familiar”) | Savers treat investing fundamentally differently to investing, driving anxiety and a preference for cash. | Reframe investing as a natural extension of saving and promote investment products that feel familiar. | Focus on long-term goals and channel regular savings into simple investment products. |
| Risk feels too high (“Risk Distortion”) | Many non-investors feel investing risks ‘losing everything’ | Improve understanding of risk, diversification and how risk diminishes over time. | Start small and build confidence through investing. |
| Investing seems too complicated (“Effort Inflation”) | Savers overestimate the time & effort investing requires. Jargon & too much choice creates friction & choice paralysis | Reduce complexity and friction, simplify language and make investing more visible in familiar channels. | Start with simple, low-effort investment options. |
| Lack of trusted guidance (“Guidance Gap) | Many non-investors lack trusted guidance making them feel ‘alone’ | Work with trusted voices and provide clear starting points and simple explanations. | Normalise conversations about money and use trusted tools to build confidence. |
