Generation Y have never before seen a recession. A survey has found that they are taking notice of the current global financial crisis, which has weakened their appetite for investing.
Once known as being among the most adventurous and carefree of all investors, those born in and after 1980 have suddenly become more conservative than their baby boomer parents. The portion of Generation Y who treat investing as a hobby, has dropped from 30% in 2008 to just 7% in 2009.
This collapse in interest in investment marks a significant shift for a generation that until recently had only known a rising share market, a strong economy and low unemployment.
For Generation X (those born in the decade or so before 1980) the proportion of those investing for a hobby had a gentler decline, from 18% in 2008 to 14% in 2009. The Baby Boomers (the generation before X) remain a powerful force in investment as they have been less deterred by the market turmoil.
The experience of a falling share market, collapsing companies, uncertain economy and high unemployment has contributed to Gen Y developing into cautious and conservative spenders when it comes to investment.
On the other hand, Generation Y has actually increased the money that they spend on going out, by 31% compared to the same time last year. They are spending more on smaller purchases such as Iphones, GPS navigators and electronic games.
The comfort of still living at home with their parents contributes to their ability to spend more frivolously. The amount of twenty-somethings still living at home has grown by around 300% in the past 20 years.
In saying this, Generation Y’s are still striving to save that ‘housing’ deposit as they follow in their parent’s footsteps by wanting to invest in property.
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