Londoners top in the UK for wanting to provide financial help for extended family
43% of Londoners would be willing to set up a Junior ISA (JISA) for a grandchild, nephew or niece if the rules allowed it – compared to 28% for the UK as a whole
Under the current JISA rules, only parents or legal guardians can open a JISA for a child
Parents of young children tend to have their hands full in the early years, and the majority don’t get round to setting up something like a JISA 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 strong appetite amongst Londoners for a shake-up of the Junior ISA (JISA) rules to allow members of the child’s extended family to open accounts for children.
The modern mutual argues that a single line in the JISA rules is standing in the way of extended family being able to step up to help out young families. It also believes that expanding access could unlock much better financial futures for more children across the city.
The research comes at a time when families are under growing pressure, with 28% of adults in the capital saving less than they were a year ago. Fifty-eight percent of Londoners blame the rising cost of living, making it harder than ever for parents to prioritise saving and investing.
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 capital 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 own data shows that new parents tend to wait until the child is at least four years old before they set up a JISA, 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 capital 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.”
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Editor’s notes:
Notes to Editor:
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.
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.