Members of Gen Z have started investing early. Photo / Luis Alvarez, Getty Images
Research into Gen Z’s investment habits shows the younger generation has made a good start to their KiwiSaver contributions, but ongoing education is needed around investing for the long term.
The Horizon Research survey of 1632 respondents for ANZ Investments found young adults (born 1997–2012) were the age group most likely to have made changes to their KiwiSaver accounts in the past year.
Twenty-three per cent of respondents said they had changed KiwiSaver provider in the previous 12 months, while 10 per cent had changed their fund/investment type.
Meanwhile, 25 per cent had increased their contribution level and 26 per cent had made additional voluntary contributions.
But 12 per cent had reduced their contributions and a further 14 per cent stopped their contributions.
“Gen Z are investors; they understand this is about growing their wealth and they’ve started early, many are regularly contributing to a KiwiSaver account, which is great to see,” said Fiona Mackenzie, managing director of ANZ Investments.
National Capital’s first KiwiSaver Value for Money report earlier this year found “panic switching” during the pandemic caused more than $1 billion of Kiwis’ money to miss out on the market rebound.
The report found less experienced KiwiSaver investors aged 26-35 made five times more fund switches in 2020 than the year before.
The Horizon survey asked KiwiSaver members whether the fall in financial markets had left them more or less likely to invest.
Of those aged 18 to 24, 28 per cent said they were less likely to invest. This compared with 20 per cent of all KiwiSaver members.
However, 26 per cent of the 18-to-24-year-olds said the fall in financial markets had left them feeling more likely to invest, compared to 10 per cent of all KiwiSaver members who were surveyed.
“What leapt out at us was that 20 per cent of 18-to-24-year-olds said they were already wary of investing; and 24 per cent of all members said the same,” Mackenzie said. “This shows us KiwiSaver providers the importance of ongoing education about investing for the long term.”
To help connect with younger KiwiSaver members, ANZ Investments is launching a series of social media videos discussing basic investment topics.
“Social media platforms like TikTok and Instagram are where many get their information and we’re aiming to give them simple and useable information in ways which best suit them,” Mackenzie said.
“There are lots of ways to make investing complex or hard, but there are also great ways to make it easy. One of those actions is opening a KiwiSaver account.”
In fact, research last year from Finder showed as more young Kiwis turned to DIY investing, so too did their reliance on online platforms for advice.
This was the case for 44 per cent of Gen Z respondents, compared with a quarter of millennials (25 per cent), just 9 per cent of Gen X and 3 per cent of baby boomers.
According to ANZ Investments’ customer data, 63.8 per cent of members aged 18 to 25 are making employee contributions, compared with just over 54 per cent of all members who made an employee contribution in April this year.
When accounting for all Gen Z members, just under half (46 per cent) are making regular employee contributions.
“The youngest members of Gen Z are in their early teens but the oldest are studying or working, many of them well into a career,” Mackenzie said.
“That’s really encouraging … but we’d like those numbers to be even higher.”