From Morningstar: 2024-03-27 06:30:00

Junior ISAs, launched in 2011, have become a popular way for parents to save for their children’s future. With an annual allowance of £9,000 per child, these accounts can be invested in stocks or cash, offering higher savings rates than adult ISAs. Parents can save up to £162,000 over 18 years without interest.

Investing in JISAs can lead to significant returns, with a potential of almost £300,000 by the child’s 18th birthday. Despite the generous allowance, many parents may not max it out every year, but can catch up by making larger contributions when possible. JISAs can help finance major life events like buying a house or paying for university.

HMRC figures show that £1.5 billion has been subscribed to Junior ISAs, with 42% of funds in cash. Advisers recommend diversifying investments towards equities to maximize returns over the long term. The account belongs to the child, who can take control at 16 but can’t withdraw funds until 18, allowing for compound growth over time.



Read more at Morningstar: Junior ISAs: Rules and Allowances Explained