Surge in young investors at start of 2021 lowers average age of traders

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The surge of younger investors in the first two months of 2021 has contributed to the average age of new UK traders falling by 12.5%, according to new research by online trading platform, Saxo Markets.

In a unique year with many high-profile events impacting the stock market, Saxo Market’s internal data relating to thousands of traders worldwide shows that this has had an effect on the average age of a UK trader. Between January 2020 and February 2021, the average age of a new trader has dropped by six years.

In January 2021, the average age of a new trader in the UK has dropped from 40 years old in December 2020, to 36 in January and 35 in February 2021. However, the data shows that the age of new traders has now risen in March 2021.

Average age of new traders at the beginning of 2021:

Month

December 2020

January 2021

February 2021

March 2021

Average age of trader

40

36

36

39

Last year, the average age of the new female trader in the UK was 42 whereas for male traders, it was 40. However, the research shows a decrease of 11.3% up to February 2021 in age for new female traders, representing a five year drop in the average age. Also seeing a significant drop in age are male traders, who are taking an interest in the stock market earlier – the average age of a male trader dropped to 35 by February of this year, a 13.6% decrease compared to early 2020.

Profiles of new average traders in February 2020 vs. February 2021:

Trader Type

Average Age in 2020

Average Age in 2021

Male

40

35

Female

42

38

Although the pandemic can be viewed as a catalyst for the younger demographic’s increased interest in trading, other factors played a part. According to Peter Garnry, Saxo Group’s Head of Equity Strategy, “the last couple of years’ bull market, improving labour market dynamics, a larger focus than ever by media on technology stocks, the rise of crypto has attracted many young people and women into equity investing.

Many arrived during the rebound phase last year when many people were forced into lockdowns, and this not only has shifted the profiles of traders, but also the approach to trading. This change in approach, or investor psychology, will be interesting to follow as there is a new generation of traders and investors who will learn how to engage in a full spectrum of bull and bear markets.”

You can find out more about The Changing Traders via the Saxo Markets website.