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Give your child financial freedom | Junior ISA

Whether you want to help your child with the cost of higher education, a downpayment on a house or their wedding. There can be many reasons why you want to save to give your child a lump sum. However, it can feel like an insurmountable challenge. But it doesn't have to be that way. With the help of tax-free perks, regular deposits and the magic of compound interest the help that you dream of giving your children is within your potential.

That is where Junior ISAs come in. They are tax-free savings accounts for under-18s that can either be held in a cash ISA (like normal savings account where the rate of interest is set by the bank) or in a Stocks and Shares ISA (where there is more risk but more potential for return).

Currently the maximum you can invest each tax year is £4080. Were you to invest this amount for 18 years assuming a 3.25% interest rate which is the current best (by nationwide). The when the lump sum at the end would be over £98,000.
Many providers allow you to start saving with as little as £1 so there is nothing to stop you starting to contribute to a junior ISA even if it is smaller amounts.
Lets say you can't afford to make such a large contribution each year. For example you invest £30 a week at the end there would be over £35,000. That is is enough to give serious financial assistance to your child all for £30 a week.

Not got £30 a week to spare. Think about the simple ways you could make little changes to free up that money.

  • Taking a pack lunch to work everyday could save between £5-10 a day quickly freeing up money to save in an ISA.
  • Bring your own tea and coffee. At £3 at cuppa in many places the cost of your morning fix quickly mounts up. If you gave up a coffee every work day until your child was 18 you could have over £17,000 saved.
  • Another simple way is to save the Child Benefit money you receive, for many it is not an essential state benefit and so creating a habit out of having it automatically be saved and with the power of compound interest can result in a decent sized lump sum at the end.

Do you use junior ISAs? Do you find them a good investment product?


  1. So does the child have custody over this account or the parent? Because it seems like bad news for a 10 year old to have control over an account that could have about forty thousand pounds in it.

  2. We have a Dutch equivalent of such Junior ISA, and we use it to save for our children indeed. They will have custody over it when they reach the age of 18, and may use it for housing, a driving license, car of whatever they see fit.

    We save for their college tuition separately, since we don't trust the brains of the average 18-year-old to always make smart money decisions. We wouldn't want them to 'learn' by losing their money for college.

  3. WE never used the tax-advantaged accounts to save for college because they required us to give up control of the money. I have no problem paying for the kids' college, or helping them get a stat in life but I'm not giving any 18=20 year old a substantial stack of my money to spend as she or he pleases.

  4. I like the idea of saving child benefit to go into a junior ISA. I have a savings account for my little girl, I would like to save more each month but at the minute we have so much to save for. I'm confused about who gets to manage a junior ISA though - I'd prefer to control it myself until she's 18.

  5. I have been saving my children’s child benefit to their Child Trust Fund which is similar to Junior ISA. I hope the savings would help as a down payment for their first home.