Young people more aware of cryptocurrency than any other investment

Young people are most aware of cryptocurrency as an investment option according to research¹ by the Association of Investment Companies (AIC) among non-investors aged between 20 and 40.

Seven in ten young people (70%) are aware of cryptocurrency such as bitcoin, ranking well ahead of individual stocks and shares (59%), premium bonds (49%), bonds (43%), investment funds (23%), forex (21%), investment trusts (18%) and investments through crowdfunding platforms (also 18%), according to the research conducted by Research in Finance.

Lack of understanding – feeling cautious, worried and confused…

Young people say that the biggest barrier to investing is their lack of understanding and knowledge (57%). The cost of living crisis is the second greatest hindrance to investing (53%), followed by not having enough money in general to start investing (45%), being worried about markets or the economy at the moment (39%) and being worried that investing is generally too risky (30%).

Considering these barriers to investing it’s not surprising that young people describe their emotions around investing as cautious (54%), worried (41%), confused (39%) and stressed (25%). The two positive emotions identified by non-investors were interested (43%) and excited (16%) – although only 12% of women were excited in comparison to 32% of men.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “Some of us may find it shocking that young people are most aware of cryptocurrency as an investment option. But this demonstrates that the investment industry needs to do more to help young people understand the range of investment options, the risks involved and how investing can help them save for the future.

“Lack of knowledge is the biggest barrier to young people investing but the cost of living crisis comes a close second. Clearly, these are challenging economic times and an increase in salary is the key catalyst to encourage people to invest with help from a financial adviser coming second.

“It’s really encouraging that young people want to find out more about investing. We need to help them by providing clear information that’s easy to understand online and on social media.”

Views on investing – “glorified gambling”

When asked to describe their views about investing, young investors’ concerns about risk come across strongly, especially in the context of a stalling economy.

One investor said: “It is like glorified gambling, you put money into shares without knowing if it will go up or down and you could even lose that money forever if it goes bust.”

Another commented: “Given the state of the world at the moment I am uncomfortable investing, it’s too risky, my dad has already lost a large total in his pension.”

But they are keen to find out more

However, just over four-fifths (81%) of young people are interested in finding out more about investing now or in the near future. Just over a third (34%) of all respondents have considered investing but don’t feel confident enough to start.

When asked what would encourage them to start investing, an increase in salary (58%) and help from a financial adviser (46%) were the most important catalysts. Winning the lottery came third (43%), followed by a recommendation from someone they know such as family or friends (41%), more information on the benefits of long-term investing (38%) and inheriting money (33%).

Where do young people go for information on money and finances?

Not surprisingly most young people look online for information on money and finances. Googling or an online search is by far the most popular way of finding out more (40% of respondents), alongside Instagram (19%), YouTube (18%), websites in general (13%), Facebook (13%), Twitter (8%), TikTok (8%), LinkedIn (4%) and Reddit (4%).

Talking to friends and family is also popular. Over a quarter of respondents (28%) go to friends for information on money and finances, 20% ask their parents, 23% go to other family members and 7%quiz their colleagues.

Traditional media still has a role for young people researching money and finances. Just over a fifth (22%) of respondents read the finance sections of newspapers and the same proportion (22%) read books.

To find out more about investing with investment companies visit theaic.co.uk/learn-more