Zoomers now investing 8 times more: Sber studies the financial habits of different generations

In anticipation of Youth Day, Sber analyzed how its clients, representatives of various generations, form savings and increase their capital. The study was based on products by Wealth Management companies (Sberbank life insurance, NPF of Sberbank, Sber Asset Management).

The analysts used the Pew Research Center classification for the study:

• boomers (1946-1964)
• Generation X (1965-1980)
• Generation Y, or millennials (1981-1996)
• Generation Z, or zoomers (1997-present)

Zoomers invest the most actively

In 2021, zoomers started investing actively: the volume of funds invested in Sber Asset Management investment instruments increased almost eightfold and reached RUB 7 bn. An increase in investments in fiduciary management instruments was noted among all age groups, but it was zoomers specifically who showed the most change. Investments by millennials and Generation X doubled (reaching RUB 25 bn and RUB 88 bn, respectively) and boomers' investments increased by 50% (RUB 124 bn).

Millennials saw the largest rise in the number of investors in a year - a fourfold increase. The number of zoomers investing tripled in a year, while the number of investors among Gen X and boomers rose by 60% and 30%, respectively. The more active rise in investors among younger age groups is due to the appearance of discretionary investment management instruments (mutual funds, discretionary investment management strategies, PIAs) in SberBank Online in early 2020.

With regard to the most popular investment tracks, zoomers tend to favor bonds (55%), with the majority using PIAs with readymade strategies to invest in bonds. Shares are the preferred investment form for 45% of Gen Z. Millennials enjoy bonds and shares equally. Many millennials prefer hybrid funds, which invest in both shares and bonds. Gen X is more conservative, with 60% preferring bonds and another 6% choosing capital protection strategies. Boomers are the most pragmatic and conservative investors, with 75% investing in bonds (65% use PIAs with readymade strategies), 13% invest in the stock market using capital protection strategies, and only 12% invest in shares.

A new way of saving

Zoomers continue to choose alternative methods of increasing capital in 2021: the average value of investment life insurance deals concluded with Sberbank life insurance increased by 30%, to RUB 850,000, with millennials closely following (a rise of 2.4%, to RUB 817,000). Sberbank life insurance clients tend to develop capital through investment life insurance over a five-year period: 71% of Gen X and 68% of boomers do the same.

Life insurance endowment policies to build up savings are mostly popular among Gen Xers, which account for 35% of the agreements, and millennials (25%). The average amount that Sberbank life insurance customers with endowment policies target to save stands at RUB 1.2 mn. Here's what clients expect to save: RUB 623,000 (zoomers), RUB 927,000 (millennials), RUB 1 mn (Xers), and RUB 1.2 mn (boomers).

Nearly one-half of zoomers sign life insurance endowment agreements for a five-year term (41%). In 2021, slightly over a quarter of millennials pursue the same tactic (26%), with another 27% taking out policies for 6-10 years. As for Gen X, 41% choose more long-term savings strategies (11 years or more). Boomers mostly build up savings through life insurance endowment agreements maturing in 6-10 years (43%).

If you want peace prepare for retirement

The vision of the future varies across the generations, which choose different strategies to make their lives comfortable once they stop working. In 2021, Gen X is in the lead with the biggest number of SberNPF agreements. Millennials, too, started thinking about tomorrow more after the pandemic-laden 2020, having signed nearly 75% more individual pension plan (IPP) agreements. Zoomers have signed three times as many IPP agreements.

The term of an IPP agreement averages 8-11 years for Gen X, 22-24 years for Gen Y, and 35-36 for Gen Z. Boomers deposited the biggest amount of money in the premium IPP segment of SberNPF (RUB 6.5 bn). In the segment for mass users, Gen Xers were the ones that deposited the most (RUB 1.3 bn).

In 2021, clients of all ages deposit into their pension accounts more often, with Gen X and Gen Y people doing that twice a quarter and zoomers doing it once every three months.