In a striking revelation about generational outlooks on wealth, more than half of millennials, those born between 1981 and 1996, express confidence in their financial futures, believing they are on track to achieve affluence. This optimistic view is notably higher than that of Gen Z, with only 16% of those born from 1997 to 2012 sharing similar financial aspirations.

When comparing these findings with older generations, a pattern of increasing pessimism emerges. The Silent Generation, born between 1928 and 1945, is particularly doubtful about future wealth, with a mere 6% expecting to become affluent. Meanwhile, 11% of Baby Boomers, who were born from 1946 to 1964, and 15% of Generation X, born from 1965 to 1980, see wealth accumulation in their future.

This data comes from a ‘money mindset’ survey conducted by Charles Schwab, an investment firm that surveyed 1,000 individuals to understand their saving habits and financial outlooks. The survey underscores a significant difference in outlook between those who actively invest and those who primarily save cash.

Investors appear significantly more optimistic, with 57% feeling confident about becoming wealthy. In contrast, only 13% of those who primarily rely on cash savings feel they are on the same path. This stark difference highlights the impact of investment on perceived financial trajectories.

Savers, not investors: Just one in three Britons funnels spare cash into investments

It found investors are four times as likely than savers to feel on track to build wealth.

Some 57 per cent of those who invest feel on course to be wealthy while for those who stick to cash it is just 13 per cent.

Even for financial comfort, the chasm between investors and savers remains as 70 and 29 per cent, respectively, believe they will feel this security.

Despite this significant gap, the UK is still a nation of savers and not investors, the US firm finds, as just one in three British consumers are currently funnelling their money into investments.

For savers, the top reasons for keeping money in cash including ‘not having enough money’, fear of losses on the stock market and keeping money easily available for emergencies.

Investing is riskier than keeping money in a savings account, and investors could get back less money than they put in.

However, the benefits of investing far outstrip cash over the long term. Plus, as compounding gets to work, the gains will snowball.

For example a £1,000 lump sum saved into a cash Isa in 1999 was worth just £2,079 in September last year, according to calculations by AJ Bell.

If that money was instead placed in an average global fund, it would have grown to £5,158. Funelled into a North America fund, it would have ballooned to £6,285.

Millennials remain extremely hopeful about their future wealth prospects. Some 60 per cent of them invest, the survey found, and 54 per cent are confident they will build wealth.

Others are less sure. Across all age groups, nearly three in four are pessimistic about becoming affluent in their lifetime.

Wealthy can mean different amounts to different people. Some many think an annual income of £200,00 makes them wealthy while others could believe they need assets of more than £2million. 

Inflation and the rising cost of living are top concerns for 64 per cent of those polled, which makes it harder for those with only a small amount of spare money to stomach funnelling their cash into the stock market.

More than half of households have been forced to reduce the amount their funnel into savings or investments, dip into their emergency funds or stop saving altogether amid soaring costs of everyday items.

Less than three in ten report no real change their ability to save or invest.

Richard Flynn, managing director of the firm, says: ‘Investing, even in small amounts, can be a powerful tool for building long-term financial security. 

‘The cost-of-living crisis is making it harder than ever for Britons to save and invest for their futures, and it’s clear that many are losing confidence in their ability to build wealth.

‘These are quite alarming findings, as a significant number of people in the UK are not only struggling to invest, but many are also doubting whether they will achieve financial comfort and wealth in their lifetimes.’