Lloyds Bank has launched a new account for young adults, called Invest Wise, to help them start investing.
This account is free for 18 to 25-year-olds and can be managed alongside their everyday banking in the Lloyds Bank app. Once they turn 26, there's an admin fee of £40 per year.
You can start investing from just £20 per month into an Invest Wise Isa or a non-Isa Invest Wise account. This service will also be available to Halifax and Bank of Scotland customers, under the name 18-25 Investing.
A survey by Opinium for Lloyds found that most 18 to 25-year-olds want to invest to buy a house or pay off a mortgage. Almost half (42%) said they ask their parents for money advice.
Manuel Pardavila-Gonzalez, managing director at Lloyds Bank Investments, said: "Seeing more young people switched on to investing and using it to connect with their life goals means we need to do more to help them start making their money work harder now." He added that parents can play a big role in teaching their kids about money and planning for the future.
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Rachel Springall, a finance expert at Moneyfactscompare.co.uk, shared: "The Invest Wise account and Invest Wise Isa could be an enticing way for consumers to dip their toe into funds, and those aged between 18 to 25 don't pay an admin fee. The convenience to monitor these accounts within the Lloyds app may also be helpful to those who want to keep a close eye on their pots, and prefer mobile banking."
Rachel explained: "Traditionally, stocks and shares Isas would be chosen by investors who are prepared to invest for better returns over the longer-term on the basis that performance might fluctuate over shorter timescales but it is essential (for investors) to regularly check the performance of their pot and seek advice if they need to review their risk profile."
For first-time savers, she suggested: "Those who want to start saving for their first home could open a Lifetime Isa, where the Government will apply a bonus of 25% on contributions, but savers will need to check the terms and conditions of these accounts to ensure it suits their needs."
She advised: "The most suitable account for any saver will depend on their own circumstances. Those considering stocks and shares must keep in mind that past performance is never guaranteed to be reflected in future returns, so it's crucial investors are comfortable with their attitude to risk."
Lastly, Rachel said: "Those who are unsure may avoid investing altogether and keep their pot earning interest instead, but this attitude is always worth reviewing."
The value of investments can go down as well as up and it's usually for the long-term. For those who want guaranteed returns, there are options to keep your savings in cash. It's also a good idea to get financial advice before deciding what to do with your money.
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