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According to the 2015 Old Mutual Savings & Investment Monitor results, approximately 50% of
Generation Y (born after 1980) don't contribute towards a pension or provident fund. But what is stopping
Millennials from investing in their own futures? It turns out, a number of things.
The 2008 financial crisis resulted in significant cuts in exports and a steep decline in commodity
prices, forcing many of South Africa's mines and factories to downsize or shut down completely. As
stock prices dropped, Millennials witnessed citizens from across the globe lose their life investments.
This bred a lot of scepticism, leaving a large number of Generation Y unconvinced that investments are
worth their while.
According to Statistics South Africa, the country’s unemployment rate increased from 25% in the
second quarter to 25.5% in the third quarter of 2015. Unsure whether or not they’ll find work once they’ve
completed their studies, many Millennials are looking for opportunities abroad. Rather than invest, they
prefer easy access to their funds to cover their everyday living expenses and to save should they choose
As a result of Millennials' reluctance to invest, a lot of them might be stuck with small nest eggs.
Those who do invest often adopt a very conservative approach to investing, which may result in their
portfolios not being aggressive enough to ensure growth. The reality is that if Generation Y fails to invest,
they may not have the financial means to retire at the age of 65.
Even though they may not have a lot of money to invest, Millennials have the great advantage of
time. With a long investment horizon, those who invest today will need to contribute less money than
their counterparts who start later in life.
From as little as R500 per month, Old Mutual Unit Trusts offer Millennials a flexible investment
option and long-term inflation-beating growth. And whether they reside in South Africa or choose to go
abroad, this investment option offers the benefit of no contractual term and easy access to funds.