Parents increasingly use Junior ISAs for children's savings

Many parents and grandparents are now trying to save money to help their children achieve important life goals, such as university, buying a home, or getting married. The costs for these milestones have increased significantly. For example, university fees can reach £60,000, and a house deposit typically requires £50,000. Weddings can cost around £20,000. One way to save for these goals is through a Junior ISA (JISA). This is a tax-free savings account for children under 18 in the UK. There are two types: cash JISAs and stocks and shares JISAs. Parents or guardians often set these accounts up, but others can contribute as well. The maximum amount you can save in a JISA is £9,000 a year. If you want to save for university, you may need to set aside about £60,000. If you start saving from birth, you would need to put away roughly £175 a month, assuming a 5% annual growth. If you start saving later, such as when the child is 5 or 10 years old, the monthly savings would increase. For a house deposit, around £50,000 is needed. Starting from birth, you would save about £145 each month. Again, if you start saving later, the monthly amount will be higher. Money saved in a JISA can later be moved into a Lifetime ISA, which can help young adults when buying their first home. For a wedding, you should aim to save around £20,000. This could mean starting with £100 and adding about £60 monthly from birth. The amounts change if you begin saving when the child is older. Some parents might consider a Junior self-invested pension (SIPP). This helps save for retirement, but funds can only be accessed when the child is older, which keeps them from spending the money before then. When it comes to where to invest this money, many experts recommend focusing on stock options for better growth over time. It's essential to think about the different investment strategies as the child grows older and may need the funds soon for specific goals. Ultimately, while JISAs can help, it's important to note that the money belongs to the child when they turn 18. They'll have the choice of how to use those funds, which can sometimes lead to unexpected decisions.