I saved £50 a month for my kids – at 10 and 12, they now have £15,000

A father who started saving for his two children before they were born has already built up a pot of almost £15,000.

Lee Cullen, 41, who runs a digital marketing agency, says he wanted to give his children something he never had growing up.

So he decided to start saving into junior ISAs, a tax-free savings accounts for under-18s, where parents can save up to £9,000 a year that is locked away until adulthood.

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He had the idea of putting £50 away every month for each of his two children before they were born in 2014 and 2016.

Speaking to The i Paper, he said: “In my mind, this would be more than £10,000 each for them when they reached 18 – not including any interest – and I felt this would be an amazing amount of money to help them for the future in some way.

“I didn’t have anything like that growing up so I thought putting it away little and often each month would be the best way.

“I started when my oldest was born. Initially, I started doing this in simple easy-access savers accounts as I wasn’t aware of junior ISAs.

“But around five years ago, I realised the interest rate in these accounts were much better, so I decided to lock in.”

He now uses junior ISAs – or JISAs – with Nationwide, as it offered the best interest rate at the time, and says consistency has been key.

Currently, both JISAs offer 2.8 per cent in returns but have historically been higher.

Lee added: “Nationwide has paid some bonuses out in recent years, which the children have also received and that was a really nice bit of added value.”

The sums have grown steadily into four-figure balances for both children – with £7,900 and £6,500 saved respectively.

“They’re both doing pretty well so far. My oldest will be 12 in August, and my youngest is 10 in June.

“Putting away that money every month means we’ve had to be quite disciplined with savings, but I’m really pleased the amounts are growing so well and by the time they are 18, it will hopefully help them have a bit of a headstart in life.”

JISAs are now held by more than 1.3 million UK children, the latest official figures suggest, with billions of pounds saved tax-free as parents increasingly use them to build long-term financial safety nets for the next generation.

In 2023/24, £1.8bn was subscribed to JISAs, around 36.4 per cent of which was in cash. The average subscription that tax year increased to £1,347 – an increase of 10.4 per cent on the 2022/23 figure.

How to open a JISA

There are two types available – cash JISAs, which pay interest like a normal savings account, and stocks and shares JISAs, where money is invested and can rise or fall in value. Each child can hold one of each.

They can be opened through banks, building societies, investment platforms and specialist savings providers.

Parents usually need basic identification for themselves and the child, such as a birth certificate, and the account is then managed online or via app.

Funds are locked until the child turns 18, at which point the account transfers into their name and can be accessed or moved into an adult ISA.

Financial advisers often highlight that regular contributions over time, rather than large one-off payments, tend to build the most significant balances through long-term growth and compounding.

“The long-term aim has always been to give them financial breathing room at 18, so they can go to university, buy a car, or have some money to put towards their first homes.”

It hasn’t been easy though, he said, adding: “I think it can be really tough to find the money, especially if you’re a young parent or perhaps at the start of your career.

“But my advice would be to start small with anything you can afford and be consistent with it.

“£100 a month was a stretch for me 10 years ago, but I stuck to it and I made sure to move the money into their accounts as close to pay day as I could – and I still do that now.”

Now based near Chester, he says his own savings have been reduced after home improvements, but the children’s pots remain untouched and growing.

Other ways to save for children

While JISAs are a popular, tax-efficient option, they’re not the only way to build a nest egg for a child.

Depending on your goals, risk appetite and time horizon, there are several alternatives worth considering:

Premium Bonds

Offered by NS&I, Premium Bonds don’t pay interest in the traditional sense. Instead, bondholders are entered into a monthly prize draw, with tax-free winnings ranging from £25 to £1m,. Children can hold Premium Bonds, and they’re backed by the UK government, making them a low-risk option. But returns are not guaranteed, so they may not keep pace with inflation over the long term.

Children’s savings accounts

High street banks and building societies offer dedicated children’s savings accounts, some with competitive introductory rates. These can be a good option for shorter-term savings or for teaching children about money, though rates often drop after an initial period.

Bare trusts

A bare trust allows you to invest money on behalf of a child, with assets held in the child’s name but managed by an adult until they turn 18. They can be used for a wide range of investments, including funds and shares, and may offer more flexibility than a junior ISA. Tax rules can be more complex though, particularly for parental contributions.

Children’s pensions (junior SIPPs)

It may sound surprising, but children can have a pension. A junior SIPP allows contributions of up to £2,880 a year, which the government tops up with tax relief to £3,600. While the money is locked away until at least age 57 (likely rising), the long investment horizon means even small contributions can grow significantly over time.

Investment accounts in a parent’s name

Some parents choose to invest in their own name and earmark the money for their child. This provides full control over when and how the funds are used, unlike JISAs which transfer to the child at 18. It’s important to note that returns may be subject to income and capital gains tax.

Cash gifts and regular investing

Family members can also contribute through regular savings plans or lump-sum gifts invested into funds or accounts. Over time, consistent contributions, even small ones, can build into a meaningful pot.