People born after 1981 are being urged to take action before the ISA deadline on Sunday, April 5, as new data reveals a stark generational divide in savings. The average Baby Boomer holds £56,260 in an ISA, nearly five times the £12,010 held by a typical Millennial, according to a Freedom of Information request by Bowmore Wealth Group.
The gap is even wider when compared to the Silent Generation (born before 1946), who have average ISA savings of £67,950. Meanwhile, Generation Z (born 1997-2012) holds an average of £8,690, not far behind Millennials. Experts suggest Millennials have struggled due to sluggish wage growth and high housing costs following the Global Financial Crisis.
John Clamp, Chartered Financial Planner at Bowmore Financial Planning, said: 'The data highlights a clear generational divide when it comes to ISA savings. While older generations have benefited from decades of compounding and consistent contributions, younger investors appear to be falling behind.' He added that even small regular contributions can build significantly over time thanks to ISA tax advantages.
The current £20,000 annual ISA allowance resets on April 6, and any unused allowance is forfeited. From April 2027, changes introduced by Chancellor Rachel Reeves will limit cash ISAs to £12,000, with the remaining £8,000 needing to be placed in a stocks and shares ISA. Bowmore advises those with a higher risk appetite to consider investing in a stocks and shares ISA, which historically outperforms cash over the long term.
Clamp concluded: 'The challenge for many investors is balancing short-term uncertainty with long-term opportunity. While holding cash can feel safer, it can also limit growth potential, particularly in an inflationary environment.'
