Empowering the next generation: JISA to the rescue

As Elastigirl from The Incredibles wisely said, “Girls, come on. Leave the saving of the world to the men? I don’t think so!”. Taking a leaf out of Elastigirl’s book, we shouldn’t leave the responsibility of our children’s or even our own financial future to one half of the parenting team. Let’s overcome the fear of making mistakes and embrace the opportunity to expand our knowledge.

It's essential to remember that even if the named representative is the dad, the money doesn’t belong to either of you, so you should have an equal say in how it's invested. So, get involved. You can learn from one another or learn together side-by-side. It can help to talk through things as you go, to build your confidence.

A Junior Stocks and Shares ISA (JISA) is a great way to start building your child’s wealth while teaching them about saving and investing from a young age. It is a tax-efficient investment account, with returns free from income and capital gains tax. For the 2024/25 tax year, the contribution limit is £9,000. The money you put in belongs to the child, but they can't access it until they turn 18, building a nest egg for their future.

The gender split of HL JISAs is almost equal to parity, 52% held by boys and 48% by girls, but the gap widens when it comes to adult ISAs. However, women who have taken the plunge and opened HL Stocks and Shares ISAs tend to hold larger balances than their male counterparts. As of September 2024, women had an average balance of £61,206, compared to £59,232 for men.

JISAs are often a sensible place to start investing due to the ability to invest little and often, a third of HL JISAs are built with regular monthly payments, and the power of compounding. With compounding, those contributions can add up impressively by the time your child reaches adulthood.

Keep in mind that a child cannot hold both a Child Trust Fund (CTF) and a JISA simultaneously. If you currently have a CTF and wish to open a JISA, you will need to transfer the assets from the CTF to the JISA first.

Here’s 3 tips for how you can use the Junior ISA to empower your children to save and invest with confidence.

1. Teach financial responsibility: setting up a Junior ISA is not just about saving for your child’s future, it's about instilling financial literacy. As your child gets older, involve them in the process. Show them statements, discuss the importance of saving and introduce them to the basics of investing.
2. Encourage investing for the long term: you have full control of a JISA until your child reaches 18, with no withdrawals permitted. This allows you to manage how the money is invested, providing the money with ample time to grow. After that, the account becomes theirs to manage. This is why tip 1 is particularly important.
3. If you can, set up regular contributions: automate your savings to ensure you’re consistently building up the account.

Investing in a JISA for your children not only helps secure their financial future but also enables you to build your knowledge and confidence in investing.

It's your child's investing best friend — and yours too. With no account or dealing fees, kids go free. Explore other charges here and consider taking the first step today. Your child will thank you for it.

Find out more about Junior Stocks and Shares ISA