03-05-2025
Britain's richest children already have six-figure savings
Hundreds of children already have six-figure sums in savings accounts, new data shows.
Parents can stash up to £9,000 a year into Junior Individual Savings Accounts (Jisas), which can be invested in stocks and shares or cash.
More than two million children have up to £25,000 saved in a Jisa, according to figures obtained via a Freedom of Information request lodged by savings company Standard Life. Around 2,400 are sitting on £75,000 to £100,000.
The average Jisa has a value of £4,370; however, figures reveal there are 400 children with nest eggs worth more than £100,000.
Jisa returns are tax-free, and the accounts are available to anyone in the UK under the age of 18. Introduced in 2011 as a replacement for child trust funds, they are designed to encourage long-term saving by locking away cash until the child reaches adulthood.
The accounts have become more popular among parents looking to pay their children's future university tuition fees, or to help them save towards a house deposit.
Investment experts are now calling on families to consider putting some money into child pensions.
Though more niche, child pensions have also emerged as a tax-efficient way to save for adulthood. They are government-backed savings accounts similar to Lifetime Isas, rewarding savers with a 20pc top-up.
Mike Ambery, of Standard Life, said: 'Jisas and child pensions are both great ways for families to save for their children's future.
'Jisas provide a tax-efficient way to save for adulthood, while children's pensions are great for those playing the long game as they will benefit from decades of compound investment growth.'
Assuming a parent paid the maximum £2,800 into a child pension every year, a child could have a pension pot of £75,200 by the time they entered the workforce, Standard Life said. Child pension savings cannot be accessed until retirement age, however.
Mr Ambery said: 'As children gain access to their Jisa funds at 18, it's important for parents to ensure their children understand the value of saving and making informed financial decisions before committing a vast amount of cash.
'Prioritising financial education from an early age can help young people manage these funds wisely when the time comes.
'For those wanting to take a longer-term approach, a child pension offers a structured way to build wealth over time, potentially more than doubling the eventual value of the child's workplace pension pot.'
