Nearly two in three Brits born between 1965 and 1980 hold ‘significant’ savings in cash, new research* shows, while their attitudes to investing remain more cautious.
Despite the greater returns available with stocks and shares, almost half of Generation X view investing as ‘too risky’.
Cash to the left of me…
Gen X are saving hard, the figures reveal, with an average of over £34,000 stashed away in cash savings accounts. Having accumulated savings throughout their career, many of those in their late 40s and 50s are building solid foundations for their retirement.
The survey of more than 3,000 Gen X adults by Just Group found nearly one in 10 (8%) hold over £100,000 in cash savings, while nearly half (46%) say that investing in stocks and shares is ‘too risky’ for them.
However, only holding savings in cash means missing out on the potential upsides of investing. Fewer than one in three Gen X cash savers also invest in stocks, shares or mutual funds, which means their hard-earned cash continues to fall ever further behind the pace of inflation.
Longer-term plan
Having a cash buffer for emergencies is very sensible; however, an over-reliance on cash leads to the value of your wealth being eroded.
Longer-term returns have historically been more advantageous for investors (though future returns are not guaranteed), so keeping all your money in cash means foregoing these potential rewards.
On the other hand, achieving a better balance of cash and stocks can maximise your returns without taking undue risk.
Stephen Lowe, group communications director at Just Group, said: “Our research into Gen X demonstrates the significant cash reserves that many savers are holding with hundreds of thousands of people in this generation stashing away more than £100,000 in cash.
“The research raises important questions around how Gen X get help to organise their savings and investments in the years before giving up work. Historically, cash tends to underperform shares and its buying power is more vulnerable to inflation. Apart from holding a cash reserve for emergencies, most Gen X should be thinking carefully whether their fondness for cash is undermining their preparation for retirement.”
There were regional variations within the data. Londoners with cash savings held an average of £54,508, while those living in Scotland had the smallest amount of cash savings at £21,844.
- We can help you find the right mix of cash savings and investments, at a risk exposure that feels right for you. Contact hello@cailean.co.uk or call us on 01577 212577 to arrange a consultation about your investment planning.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.