Lockdown sparks surge in young investors, says Halifax Share Dealing

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According to research from Halifax Share Dealing, more than one in 10 (16 per cent) of young people aged 18 to 24 took their first steps into stocks and shares since the start of the pandemic. 

When it comes to reasons for this surge, having more spare time was the main factor. Almost a quarter (24 per cent) say they have more time to research options and almost one in five (16 per cent) have more time to arrange investments. Having more disposable cash is also a factor for almost one in four (17 per cent) Brits. 

Out of those who had more extra money, the most popular investment options were bonds (16 per cent) followed by stocks and shares (14 per cent) and trusts (10 per cent). 

Staying at home over the last 12 months has also influenced existing investors. Almost one in four (19 per cent) have increased their investments since the start of the pandemic, and the same per cent of investors have diversified their investment products since the start of the pandemic. 

Despite this boost in engagement with the stock market, one of the biggest barriers for those who have not started are being scared of losing money, which is putting off more than a third of people (39 per cent), up 6 per cent from last year. 

This is followed by not knowing enough about the stocks and shares market (34 per cent), up 5 per cent from last year. 

The research has also highlighted a gender gap in attitudes, with more women than men hesitant to dabble in stocks and shares. Almost half (49 per cent) of women said they were too scared of losing money to invest versus 30 per cent of men. When it comes to not knowing enough about the stocks and shares market, more women (42 per cent) than men (25 per cent) said this is a barrier. 

Manuel Pardavila-Gonzalez, Managing Director, Halifax Share Dealing, says: “Lockdown has been a challenging experience for many households, however there have been some positives such as the opportunity to save money on day-to-day spending and to think more about long-term finances.  

“Although no investment is risk-free, this spike in trades suggests that people with more spare time and cash have used it to start dipping their toe into the world of investment or increase their portfolio. We saw record numbers of trades on our platform throughout lockdown as people turned to the stock market for financial planning for the future. Our research showed that stocks and shares are among the most popular investment options, and we’ve seen that banking, utilities and travel companies were some of the most sought-after sectors. 

“Investing in global firms has become more popular, particularly American companies, although the majority (90 per cent) are still investing in UK businesses. Taking the first step into investing may feel daunting for some people, most commonly because they don’t feel like they know enough about stocks and shares. However, putting some time aside to research and even starting with around GBP20 a month could not only help build up people’s confidence as investors, but also over help people reach their financial goals over the longer term.”