Millennials are too reliant on cash ISAs and are seeing their savings hit hard by inflation, a new study has found.
Commenting on the findings Gill Millen, Bowmore Financial Planning’s managing director, says: ‘For millennials investing for their long-term future, putting so much in cash is very unwise. It guarantees they will lose money.
Meanwhile Adrian Lowery, a financial analyst at investing platform and coaching service Bestinvest, highlights that ‘stocks and shares ISAs aren’t for everyone’ and ‘everyone needs a cash buffer first of all that they can draw on in emergencies and pensions are a very tax efficient way to invest’. ‘While it might be the case that the financial crisis dented millennials’ faith in the stock market, there is also evidence to suggest that the ensuing boom of more than 10 years in global markets lulled many into a false sense of security and led to some over-exuberance in backing risky assets – which has in turn been upended by this year’s reversals.
‘They can also mitigate against volatility by making sure their investments are well diversified across a range of assets, some of which will help to maintain the value of the ISA when equities hit rocky times.’
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