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Junior Isas are ten – have you got one for your child or grandchild?

If you had squirrelled away £100 a month, they could now have a pot worth £16,300

By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY 20 November 2021

The cost of bringing up children is considerable enough, without thinking about saving for their future as well.

However, even small sums put aside early on in a child’s life can make a huge difference.

As the Junior Isa celebrates its tenth anniversary, we look at the most efficient ways to save for children and grandchildren to make sure every penny saved goes a long way.

Ten years since the Junior Isa (which stands for Individual Savings Account) was launched, the savings vehicle for children has never been more popular.

More than one million plans were paid into last year, thanks to parents and grandparents setting up nest eggs for children’s futures…

‘They have a clear advantage as there is no tax to pay on interest or investment returns earned – a perk which adds up significantly over 18 years,’ says Annabelle Williams, personal finance specialist at robo-adviser Nutmeg…

WHY STOCKS AND SHARES ARE BETTER INVESTMENT

Much like with Isas for adults, there are two types of Junior Isa: cash and stocks and shares.

Cash Junior Isas are by far the most popular: constituting 69 per cent of Junior Isas opened last year.

However, experts warn that these are missing out on huge opportunities to grow their wealth. ‘I would go as far to say that cash Junior Isas are completely and utterly pointless,’ says Jason Hollands, managing director of wealth platform BestInvest, part of Tilney…

James Carthew, head of fund information group QuotedData, invested for his nieces and chose a simple single-fund strategy. ‘I started saving regular amounts each month in stock market-listed investment trust Alliance and handed over to the girls the lump sum that had built up just after their 18th birthdays,’ he recalls.

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