Case Study: Benefit from starting early

Why starting a Junior ISA early can give your children an advantage

Pete and Eliza decide to start saving early for their newborn son Ben, so they open a Junior ISA and invest £250 per month into a managed portfolio of investment funds.

Over the next 10 years, they invest a total of £30,000 into Ben’s JISA. While markets go up and down, the portfolio grows at an average rate of 5% each year.

When Ben is 10 they stop making contributions but keep the portfolio invested. It continues to grow at 5% each year. By the time Ben is 20, he has an ISA portfolio worth £64,204.

Junior ISA

One of the most popular ways to save for children is to open a Junior ISA. These are tax-free savings accounts that allow you to save up to £4,128 each year in a cash deposit or by investing in stocks and shares. There is no tax to pay whilst the money grows inside the JISA account and all withdrawals are tax free.