best interest rate<\/a> at the time, and says consistency has been key.<\/p>\nCurrently, both JISAs offer 2.8 per cent in returns but have historically been higher.<\/p>\n
Lee added: \u201cNationwide has paid some bonuses out in recent years, which the children have also received and that was a really nice bit of added value.\u201d<\/p>\n
The sums have grown steadily into four-figure balances for both children \u2013 with \u00a37,900 and \u00a36,500 saved respectively.<\/p>\n
\u201cThey\u2019re both doing pretty well so far. My oldest will be 12 in August, and my youngest is 10 in June.<\/p>\n
\u201cPutting away that money every month means we\u2019ve had to be quite disciplined with savings, but I\u2019m 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.\u201d<\/p>\n
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.<\/p>\n
In 2023\/24, \u00a31.8bn was subscribed to JISAs, around 36.4 per cent of which was in cash. The average subscription that tax year increased to \u00a31,347 \u2013 an increase of 10.4 per cent on the 2022\/23 figure.<\/p>\n
How to open a JISA<\/p>\n
There are two types available \u2013 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.<\/p>\n
They can be opened through banks, building societies, investment platforms and specialist savings providers.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
\u201cThe 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.\u201d<\/p>\n
It hasn\u2019t been easy though, he said, adding: \u201cI think it can be really tough to find the money, especially if you\u2019re a young parent or perhaps at the start of your career.<\/p>\n
\u201cBut my advice would be to start small with anything you can afford and be consistent with it.<\/p>\n
\u201c\u00a3100 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 \u2013 and I still do that now.\u201d<\/p>\n
Now based near Chester, he says his own savings have been reduced after home improvements, but the children\u2019s pots remain untouched and growing.<\/p>\n
Other ways to save for children<\/p>\n
While JISAs are a popular, tax-efficient option, they\u2019re not the only way to build a nest egg for a child.<\/p>\n
Depending on your goals, risk appetite and time horizon, there are several alternatives worth considering:<\/p>\n
Premium Bonds<\/p>\n
Offered by NS&I, Premium Bonds don\u2019t pay interest in the traditional sense. Instead, bondholders are entered into a monthly prize draw, with tax-free winnings ranging from \u00a325 to \u00a31m,. Children can hold Premium Bonds, and they\u2019re 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.<\/p>\n
Children\u2019s savings accounts<\/p>\n
High street banks and building societies offer dedicated children\u2019s 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.<\/p>\n
Bare trusts<\/p>\n
A bare trust allows you to invest money on behalf of a child, with assets held in the child\u2019s 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.<\/p>\n
Children\u2019s pensions (junior SIPPs)<\/p>\n
It may sound surprising, but children can have a pension. A junior SIPP allows contributions of up to \u00a32,880 a year, which the government tops up with tax relief to \u00a33,600. 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.<\/p>\n
Investment accounts in a parent\u2019s name<\/p>\n
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\u2019s important to note that returns may be subject to income and capital gains tax.<\/p>\n
Cash gifts and regular investing<\/p>\n
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.<\/p>\n","protected":false},"excerpt":{"rendered":"A father who started saving for his two children before they were born has already built up a…\n","protected":false},"author":2,"featured_media":405329,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,4103,176,61,1831,60,54149,174,175,2987],"class_list":{"0":"post-405328","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-children","10":"tag-finance","11":"tag-ie","12":"tag-investing","13":"tag-ireland","14":"tag-isas","15":"tag-personal-finance","16":"tag-personalfinance","17":"tag-savings"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/405328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=405328"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/405328\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/405329"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=405328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=405328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=405328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}