Two in five children whose families opened Junior Isas when the accounts were launched 15 years ago now have enough saved for a substantial house deposit, new research shows.
A further one in six has built up enough to cover three years of university, while one in 10 has accumulated at least £100,000, according to an analysis of Fidelity International customers.
Families can contribute up to £9,000 a year to a Junior Isa without paying tax on the savings or investment growth. The child can take control of the account at 16, although withdrawals are not permitted until they turn 18.
Only a parent or guardian can open and manage a Junior Isa for a child. Once the account is established, however, grandparents, relatives and friends can also contribute.
The yearly allowance may be divided between a cash Junior Isa and a stocks and shares Junior Isa.
Fidelity examined 1,700 Junior Isas opened on its platform during the product’s first tax year, 2011-12, that remain active. It found that 42 per cent now contain at least £27,000.
Junior Isas: Long-term saving could leave many children with enough money for a house deposit
The latest official figures put the average UK house price at £273,000 in the year to August 2026. That means the young account holders with £27,000 already have enough for a 10 per cent deposit.
Half of the accounts contain at least £20,600, equivalent to the reported cost of a wedding, while 15 per cent hold £65,800 or more — enough to cover three years of university.
Meanwhile, 22 per cent of these long-standing Junior Isas are worth at least £50,000, and 9 per cent have grown to £100,000 or more.
‘A Junior Isa will not remove every financial hurdle facing young people, but these figures demonstrate the difference a dedicated pot of money can make when a child reaches adulthood,’ said Jemma Slingo, pensions and investment specialist at Fidelity International.
‘These are significant sums that could offer young adults greater choice at a time when many parents are increasingly concerned about their children’s financial prospects.’
Research from AJ Bell earlier this year found that only about one in 20 young savers withdraws all the money from a Junior Isa after taking control of it at 18.
Other studies suggest some parents deliberately keep their children’s savings secret until they reach adulthood. They fear a teenager may not be financially mature enough to manage a windfall, or could spend the entire balance as soon as access is granted.
Other families take a more open approach, involving children in decisions about the account and using it to teach broader lessons about saving, money and investing.
Fidelity’s research also found that 43 per cent of parents saving for their children use cash Junior Isas, compared with 20 per cent who choose stocks and shares Junior Isas.
However, stocks and shares accounts generally offer greater growth potential for families planning to invest from birth until the child reaches 18, although returns are not guaranteed.
Fidelity estimates that investing £84 a month from birth would result in total contributions of just over £18,000 by a child’s 18th birthday. Assuming investment growth, the pot could be worth more than £27,000.
Raising the monthly contribution to £203 could produce a fund of almost £66,000. Parents and relatives would contribute less than £44,000, with the remainder coming from investment growth.
The calculations assume annual investment growth of 5 per cent after a 0.75 per cent management fee. They do not account for inflation, which would reduce the money’s future spending power.
A Fidelity survey of 1,000 parents with children under 18, conducted this summer, found that 56 per cent believed their children would find it more difficult to achieve financial security than they had. Meanwhile, 59 per cent said they felt under pressure to support their children into adulthood.
The cost of living was a concern for 62 per cent of parents, followed by house prices at 39 per cent and job security at 37 per cent.
Only a quarter expected their youngest child to become financially independent by 21. More than one in four — 28 per cent — said this was unlikely to happen until at least 26, or perhaps never.
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