Sixty-six per cent of investors between the ages of 18 and 34 began to invest for the first time last year as lockdown made their finances a top priority, according to research from Alliance Trust.

The investment company revealed that 33% of younger people who began investing in 2020 said they had done so because COVID-19 was a “wake up call” and they realised they needed a savings safety net.

The research, based on responses from a nationally representative sample of 2,001 adults in the UK, found that 26% of respondents began investing to secure a second source of income and to take advantage of market volatility.

The adoption of investing during lockdown comes as 62% of those in the UK under the age of 34 either strongly or somewhat agreed that they had started thinking about their long-term future since lockdown.

A further 65% agreed their finances had become more important to them since the first COVID-19 lockdown.

“If the COVID-19 pandemic has taught us anything, it is to ‘expect the unexpected’ – particularly when it comes to our finances,” commented head of Alliance Trust’s Investment Committee, Craig Baker.

“This message has been heard loud and clear by the younger generation who have been hard hit by the uncertainty and economic fallout of lockdown measures, and they have sharpened their focus on their financial futures.

“Building a savings safety net is a vital part of this planning, and the wide shift to investing as part of this planning is one to be welcomed as long as it is sensible, measured, and focused on the long-term – which our research suggests is the case with 35% of younger respondents investing to save for a comfortable retirement.

“Long-term, diversified investments can help power up a savings pot over the years, particularly at a time when the rates available on cash savings look likely to remain at rock-bottom levels.”

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