There are 70,550 children in Britain with 9,000 reasons to be thankful. Their Junior Isa accounts had the maximum £9,000 paid in during the 2022-23 tax year, according to a freedom of information request.
The figures, obtained from HM Revenue & Customs by wealth manager RBC Brewin Dolphin, represent a 45 per cent year-on-year increase on the numbers of Jisa accounts that were filled to the brim in the previous tax year.
Brewin’s own customer data suggests the numbers of families funding the maximum subscription for the younger generation has grown again, with a 17 per cent increase of new money flowing into Jisas between 2022 and 2024. Investment platforms report robust inflows into adult, Lifetime Isa and Junior Isa accounts during the current tax year, which advisers say has been spurred by the autumn Budget.
“The proposals to introduce inheritance tax on pension funds passed on after death has encouraged many clients to accelerate gifting,” says Daniel Hough, financial planner at RBC Brewin Dolphin.
In his experience, grandparents tend to be the group making the lion’s share of Jisa contributions. “The flow of money from one generation to another sometimes even skips the children and goes straight to grandchildren, and Jisas are a great vehicle for this,” he says.
Jisas have to be set up by a child’s parents or guardians, but once open, anyone can contribute. The child can take control of the account when they reach 16 years old, but cannot withdraw any money until they turn 18.
Although the FOI request did not break down the number of cash Jisas versus the number of stocks-and-shares accounts, if relatives have enough money to fund the whole subscription, they are likely to be aware of the long-term benefits of investing.
Last year, a separate FOI request made by RBC Brewin Dolphin to HMRC revealed that the top 50 child investors were sitting on pots averaging £761,000 in their stocks and share Jisas. More than 370 children had pots bigger than £200,000, and nearly 2,000 had amassed more than £100,000.
However, families with more modest means could still build a significant pot by investing consistently.
Starting at birth, investing roughly £150 per month could build to £50,000 by the child’s 18th birthday, assuming annualised returns of 5 per cent after investment charges. Increase the contributions to £300 per month, and your teen might expect to receive a pot worth £100,000.
When the child turns 18, their Junior investment Isa automatically turns into an adult stocks-and-shares Isa. Many parents worry that their teen could burn through the cash. However Hargreaves Lansdown, the UK’s biggest investment platform, reports that about 94 per cent of clients whose Jisa rolls into an Isa still have money invested inside one year later.
Sarah Coles, head of personal finance at Hargreaves, says it pays to prepare children for making their own financial choices from when they are very young.
“Start giving them pocket money as soon as possible so they get used to having their own money and making their own decisions,” she says, advising that parents build up the level of decision-making gradually. Increasing their pocket money, but simultaneously giving them more expenses to cover out of it teaches budgeting skills.
However, she warns that parents shouldn’t rush to pick up the pieces for their children when things go wrong. “Kids need to make their own mistakes with money, and learn from them. They need to understand that you won’t be there to bail them out, and it’s worth them getting to grips with this when the stakes are low rather than waiting until there’s more to lose.”
Coles also recommends talking to children about their Junior Isa from a young age to build their sense of ownership. As children get older, this could extend to talking about the funds and companies they’re invested in. This is an educational strategy that veteran investor Lord John Lee uses with his own grandsons, whose Jisa portfolios contain household names such as Greggs, Hollywood Bowl and the Restaurant Group (owner of Wagamama, their favourite place for a meal with grandad).
Feeling more connected to the money will make them think harder about what they might do with it, or whether to carry on investing it, than getting a lump sum out of the blue, says Coles.
“There’s nothing that grabs a teenager’s attention like a mobile phone, so next time they’re staring at theirs, show them their Jisa on the app on your phone, and talk to them about their investments,” she suggests. “Then you can both stare at your phone together, which is at least marginally more sociable.”
