Large numbers in Northwest support Junior ISA reform to let extended family open accounts for grandchildren, nephews and nieces – something the current rules don’t allow
30% of adults in the Northwest say they would be likely to open a Junior ISA (JISA) account for a grandchild, nephew or niece if the rules allowed it
26% of parents in the Northwest support allowing grandparents to open a JISA on behalf of their child
With 41% of parents in the Northwest admitting they haven’t opened a JISA – fewer than the 43% of UK-wide respondents – expanding access could unlock better financial futures for many children across the region
For those parents who do open a JISA, the majority don’t get round to it until the child is at least 4 years old, according to Scottish Friendly’s own data
By starting investing £50 a month when the child is born rather than waiting until age 4 could add over £10,000 to the financial buffer the child has going into adulthood*
New research from Scottish Friendly shows significant demand in the Northwest for a change to the Junior ISA (JISA) rules to allow extended family, as well as parents and legal guardians, to open a JISA on a child’s behalf.
Three out of 10 adults in the Northwest (30%) say they would be likely to open a JISA account for a grandchild, nephew or niece if the rules allowed it. That is more than the UK as a whole, at 28%.
Meanwhile, over a quarter (26%) of parents in the Northwest are in favour of a shake-up of the JISA rules, and would like to see members of the child’s extended family being allowed to open an account on their child’s behalf. When looking at the UK as a whole, that rises to 28%.
Under the current rules, only parents or legal guardians can open a JISA for a child. But with 41% of parents in the Northwest admitting they haven’t opened one for their child, expanding access could unlock much better financial futures for more children across the region.
Scottish Friendly’s research shows that 26% of parents in the Northwest would like grandparents to be allowed to set up a JISA to help give the child a financial leg up as they enter adulthood.
Scottish Friendly’s number crunching shows how starting early could make a significant difference. Parents investing £50 a month from birth into a global equity fund could leave a child with over £32,000 by age 18 – compared to just under £8,000 if they started when the child was 10. (A full breakdown is provided in the two tables in Notes to Editor.)
Scottish Friendly savings specialist Kevin Brown said: “Families across the Northwest are grappling with a rising cost of living, stagnant wages, and broader economic uncertainty, meaning saving or investing for a child’s future often slips down the list of priorities. Our research shows that a great many parents have yet to open a Junior ISA for their child, and many of those who do tend to wait until the child is at least four years old, thereby missing out on crucial early years of investment growth.
“You can’t put a price on the benefit of building greater financial resilience, but you can put a pounds and pence number on the impact of delaying action. The earlier you start, the bigger the potential long-term impact. Even modest contributions, if invested from birth, can grow into a meaningful sum by the time a child turns 18, thanks to the power of compounding. That can make all the difference as they enter adulthood, enabling them to start out on a sound financial footing.
“We believe the rules around JISAs need to reflect how families live and save today, both in the Northwest and elsewhere in the UK. In many households, grandparents are already playing a vital financial role – whether that’s helping with childcare, bills or everyday expenses. Giving them the ability to open a JISA directly would be a practical change that could ease the burden on parents and increase the number of children benefiting from long-term saving and investing.
“This is about giving families more flexibility, more support and more opportunity to build a better financial future for the next generation. It’s time the system caught up with the reality of modern family life.”
-ENDS-
Contact:
MRM
07793 564 351
Editor’s notes:
The research that sits behind the Scottish Friendly Family Finance Tracker was conducted by the 3Gem between March and April this year. It comprises responses from 2,511 UK adults aged between 18 years and 65+.
The Scottish Friendly Family Finance Tracker sets out to track how UK consumers are managing their short-, medium- and long-term financial goals and priorities. In terms of short-term goals the focus in this wave of the research was on managing childcare costs over the Summer holidays.
Short-term financial goals were described to participants as being goals up to 6 months ahead, medium-term as being between 6 months to 5 years ahead, and long-term as 5+ years ahead.
Disclaimer
Remember that the value of investments can go down as well as up and the child could get back less than you paid in.
Past performance is no guide to future results. Tax treatment depends on individual circumstances which can change in the future.
About Scottish Friendly
Scottish Friendly is a leading UK mutual life and investments organisation. It provides its members and their families with a wide range of investment and protection solutions and provides life and investment products and services to other financial organisations.
Scottish Friendly has roots stretching back to 1862. Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.
Scottish Friendly, Galbraith House, 16 Blythswood Square, Glasgow, G2 4HJ
Scottish Friendly Assurance Society Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority.