Gen Z poised for great long-term investment future, research shows

In a study conducted by ANZ Investments, young adults have emerged as the trailblazers in actively managing their KiwiSaver accounts over the past year.

The Managing Director of ANZ Investments shared, "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”.

The Horizon Research survey, using the age group 18 to 24 as a proxy for Gen Z, yielded fascinating insights into KiwiSaver activity among this cohort:

• 25 percent had proactively increased their contribution levels in the past twelve months
• 12 percent had made strategic reductions in their contributions
• 14 percent decided to pause their contributions temporarily
• 26 percent had taken advantage of voluntary contributions
• 23 percent opted to change their KiwiSaver provider
• 10 percent diversified by changing their fund or investment type
• 9 percent wisely withdrew funds to purchase their first home

The Horizon survey revealed that 28 percent of 18 to 24-year-olds felt less inclined to invest, compared to 20 percent of all KiwiSaver members surveyed amidst financial market fluctuations.

Conversely, 26 percent of the 18 to 24-year-olds viewed the market downturn as an opportunity to invest, a significantly higher figure than the 10 percent among all KiwiSaver members surveyed.

“There are definitely ups and downs,” Clive Fernandes, Director of National Capital, remarks. “It’s encouraging to know young Kiwis are recognising market falls as opportunities, but we still have a sizable portion of Kiwis who shy away due to market fluctuation sentiments.”

Fernandes also echoes ANZ Investment’s Managing Director’s sentiment, saying, “The fact that one-fifth of 18 to 24-year-olds are wary of investing goes to show how crucial education about long-term investment is.”

Beyond regular KiwiSaver contributions, the choice of fund also plays a pivotal role. Among ANZ KiwiSaver members aged 18 to 25, an impressive 78 percent opted for a growth fund.

To effectively engage with the tech-savvy younger generation, ANZ Investments is launching a campaign, leveraging popular social media platforms such as TikTok and Instagram. Through engaging video content, ANZ aims to provide easily digestible information on essential investment topics.

“The utilisation of tech in the world of investing has never come at a more opportune time, especially for Kiwis looking to invest in the long term,” says Clive Fernandes. “Such numbers are encouraging, but for the financial security of all Kiwis, I believe we can do much better.”

A few crucial things to consider for Gen Z

Embrace the power of small, consistent contributions. If you're under 18, regular KiwiSaver contributions are not obligatory unless you're employed. However, you have the flexibility to make voluntary contributions regularly or as one-off payments whenever you like.

If you're below 18 and earning salary or wages subject to PAYE deductions, your employer is mandated to deduct employee KiwiSaver contributions on your behalf. While employers are not required to match contributions until you turn 18, some may voluntarily choose to do so.

By annually contributing up to $1042.86, KiwiSaver members aged 18 or older are eligible for annual matching Government contributions of up to $521.43 for ‘free’. This occurs annually from July 1 and June 30.

With the right tools, mindset, and education, Gen Z has incredible potential to create a prosperous and empowered future through smart investments and wise choices.