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Cost of Living Crisis Gives Rise to Demand for Accessible Youth Investment Accounts

Parents across the UK are choosing not to invest money for their children’s futures due to concerns over being unable to access funds until their child grows up, new research has found.

The latest consumer research of Nosso, an app-based provider of investment accounts for families, focuses on the accessibility of investment schemes, such as junior individual savings accounts (ISA) amid the cost of living crisis.

The results show that despite wanting to invest in their children’s future, 56 per cent of parents are put off tying up their money in inaccessible long-term investments for fear of needing funds sooner, such as during their children’s teenage years.

With the cost of raising a child for 18 years in the UK now estimated to be ÂŁ160,692 for a couple, and ÂŁ193,801 for a single parent, the overall rise in living costs is prompting a desire for more flexible investment products.

In this light, 51 per cent of respondents said that they would be more willing to open an investment account for their child if the funds were still partially accessible.

This sentiment was strongest among younger parents (aged between 18 and 34) at 65 per cent.

The need to offer more flexible investment products is underlined by the fact that 16 per cent of parents to under 18s said they had no savings or investments for their children, equivalent to 1.3 million families.

Youssef Darwich, Nosso’s Co-founder and CEO
Youssef Darwich, co-founder and CEO, Nosso

“All parents want to save for their children’s future and give them the best start in life,” comments Youssef Darwich, the company’s co-founder and CEO.

“But for many, this has never been more difficult, with the cost of living crisis making people’s finances increasingly uncertain.”

“For too long,” Darwich continues, “people have been given a binary choice; they opt for an instant access account with lower returns for the peace of mind they can withdraw funds if needed, or instead lock their money away for years so they can potentially make a larger return through investing.”

“By going for flexibility, and a relatively low rate, the child can miss out on thousands of pounds worth of growth by the time they’re 18,” he reveals.

The company’s findings arrive in tandem with the launch of its app-based Bare Trust account, which seeks to offer more flexible access to investments than other accounts like junior stocks and shares ISAs.

Speaking on the account’s launch, Darwich described its intention as “giving families flexibility as well as a chance to invest for their children’s futures.

“And we’re doing it in a way that is accessible, easy to understand and affordable for any family member or family friend who wants to be able to contribute.”

Unlike the majority of children’s investment and savings products, a Bare Trust can be set up by anyone – not just a child’s parents – and has no maximum contribution limits.

The company’s research found that 30 per of all people related to a child, like a grandparent, say they have more disposable income than the child’s parents.

Its latest Bare Trust account will enable extended family members to provide financial security for a child’s future.

It’s also beneficial from a tax point of view, as trustees can take full advantage of a child’s capital gains tax allowance and any money in the Bare Trust is potentially free from inheritance tax, meaning they get to leave more behind for their family.

Money can be invested whenever convenient and the ownership of the trust isn’t automatically transferred to the child when they turn 18.

At the point it is transferred, the child is entitled to all the capital and growth of the trust.

Up until then, trustees can withdraw money at any time for the child’s benefit – for example, to pay for a school trip, a musical instrument, their first car or anything else they may need while growing up.

A Bare Trust could offer an appropriate method of investment for many parents and families, providing a better long-term investment that balances greater accessibility should they want to use the funds to pay for milestones before they turn 18.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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