Millennial investors’ risk appetite increases post Budget

• 47% of millennial DIY investors are looking to take a high level of investment risk in the next 3 months
• This is an increase on the 39% who said the same just five months ago
• Gen Z investors remain the most adventurous generation in their investment approach
• 33% of DIY investors have increased their exposure to the Alternative Investment Market, up from 28% who said the same in July 2024

Millennial DIY investors’ are looking to take on more investment risk following the Chancellor’s Budget in October. Nearly half (47%) of millennial DIY investors (age 28-43) are looking to take a high level of investment risk in the next 3 months, increasing from 39% who said the same just 5 months ago, according to new research from Charles Stanley Direct.

The Chancellor announced a number of fiscal changes in her Budget announcement in October, with some measures having taken immediate effect and others yet to come into action in spring 2025. While many consumers shared their concerns over what Chancellor Reeves was going to announce, clearly millennial DIY investors emerged from the Budget feeling more bullish when it came to their investment appetite.

17% of millennial self-directed investors – dubbed DIY investors, in that they actively choose their own investments – are looking to take a ‘very high’ level of risk in the next 3 months, and 30% a ‘high level’.

Of those who are taking some level of investment risk in the next 3 months, 64% millennials say this is higher than their usual level of risk, as opposed to the 52% who said the same five months ago during the summer.

Looking across the generations, Gen Z remains the most adventurous in their approach to risk, with 56%¹ looking to take a high level of investment risk in the next three months. Interestingly though, this is marginally lower than those who said the same in July 2024 (61%), signifying a slightly more cautious approach post-Budget.

Stock market confidence…

Investment risk appetite can be attributed to expectations of the stock market. UK stock market confidence remains steadily optimistic among DIY investors, with a majority (71%) thinking that the stock market will rise in the next 6 months. A minority (12%) believe the FTSE will fall in the next six months, a minor increase from 5 months ago (10%).

Among millennial investors, 81%³ think the stock market will rise in the next six months, while 7%⁴ think the FTSE will fall.

…translating into action

With an overall optimistic view of the stock market, this has influenced a positive shift in where investors are putting their money. DIY investors are increasing their exposure to different stocks on the FTSE. 43% have increased their exposure to the FTSE 100 in the last three months, compared to the 40% who said the same 5 months ago.

38%⁵ have increased their exposure to the FTSE 350, a rise from 35% who said the same previously. 33%⁵ have increased their exposure to the Alternative Investment Market (AIM), up from 28% who said the same in July 2024 – perhaps taking advantage of its IHT relief ahead of restrictions coming into effect in 2026.

The research also showed DIY investors increasing their exposure to corporate bonds (34%⁵ vs 32%) and UK government bonds/gilts (36%⁵ vs 34%).

Rob Morgan, Chief Investment Analyst at Charles Stanley Direct, comments: “Despite the financial policy changes announced in Rachel Reeves’ Budget, this has by no means knocked DIY investors’ confidence or appetite to risk, particularly for millennials. With a number of measures yet to come into effect, this perhaps shows a savvyness among DIY investors to take advantage of the opportunities in the UK stock market, which currently has low valuations, especially against an overheated US market. This may result in readjusting their portfolios at a later stage, taking a leaf out of Gen Z’s book of high risk, high reward.

“Even with a revised level of confidence in their risk-taking approach, it is important that DIY investors make considered and practical decisions with their investments that suit their personal circumstances and needs. Taking a riskier approach – which investors may well reap the rewards from – could also impact their financial future if not thought about and managed carefully. The same rules apply to all investors here, whether doing it themselves or having investments managed for them; investing is for the long term and should be diversified in order to mitigate any chances of large losses from portfolios.”

 
Methodology 
 
The research was conducted by Censuswide with 1,000 18+ DIY Investors across the UK Research conducted between 08.11.2024 – 12.11.2024. A separate survey was conducted by Censuswide with 1007 DIY Investors in the UK (’Self-Directed’), defined as; investors who actively choose their own investments, making their own asset allocation decisions, aged 18+ between 05.07.24 – 10.07.24.

Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.

Generational divides are as follows: Gen Z (18-27), Millennial/ Gen Y (28-43), Gen X (44-59), Baby Boomers (60-78), Silent Generation (79+). Responses were not high enough in the Silent Gen to be statistically significant.