Wealthify, the online investment service which last month launched its first Junior ISA, today continues its vision to get the nation investing by reminding parents that a huge £70,000 could be accumulated, by the time their child turns 30, by saving just £20 per week.
New parents can avoid having to rush to save later in life or worry about financially supporting their kids by not delaying and investing around £20 per week – equivalent to the child benefit payment most parents receive for their first child – into a Junior Stocks & Shares ISA today. By the time their child is 18, their Junior ISA could be worth almost £30,000. If at 18 years old the child carries on investing the same weekly amount into their adult ISA until they’re 303 – the average age of a first-time buyer– they could accumulate £70,000.
With the average UK house deposit around £33,000, and as many as one in four UK house purchases relying on a parental contribution, it is good to see that many parents are starting to plan ahead, reflected by the fact that the number of Junior ISA opened from 2017 – 2018 went up by 100,000 with almost a million Junior ISAs opened in 2017.
The total amount invested in Cash ISAs in the UK fell from nearly £60 million in 2015 and 2016 to just under £40 million in 2017 and 2018. Meanwhile the total amount invested in Stocks and Shares ISAs has been rising thanks to their increase in popularity, with more than £28 million invested in Stocks and Shares ISA accounts last year. However, it seems parents across the country are taking great steps to future proof their children’s futures, and not just their own, with a total injection of £902 million into Junior ISAs from 2017 – 2018. That’s £874 million more than what was put into Stock & Shares ISAs by UK adults that same year.
Michelle Pearce-Burke, chief investment officer and co-founder of Wealthify said: “There’s an increasing expectation on parents to help their kids financially when they reach adulthood. UK parents give an average £18,000 to each child towards a house deposit and can be expected to contribute up to £5,000 per year towards university. With the cost of higher education and property set to continue rising, parents who plan to help their children with these major life expenses will need to start thinking sooner rather than later where the money will come from. Ignoring the issue now could result in an awkward money conversation between parents and children further down the line, with parents having to say: ‘sorry, we can’t help’ or resorting to raiding their own investments or retirement savings.
“At Wealthify, our Junior Stocks & Shares ISA is a quick and easy way for parents to start building a nest egg for their kids that they can’t dip into. We also wanted to give parents the additional choice to invest ethically – in the most sustainable businesses – towards their kids’ futures’’.