Widespread backing among parents for JISA rules shake-up
Almost 4 in 10 (37%) of parents want grandparents and extended family to have the ability to set up a JISA for their child
With 43% of parents admitting they haven’t opened a JISA, expanding access could unlock better financial futures for many children across the UK
For those parents that do open a JISA, the majority don’t get round to it until the child is at least 4 years old
Starting investing £50 a month when the child is under 4 years old could add over £10,000 to the financial buffer the child has going into adulthood*
New research from Scottish Friendly shows widespread public support for a shake-up of the Junior ISA (JISA) rules to allow members of the child’s extended family to open accounts for children.
Under the current rules, only parents or legal guardians can open a JISA for a child. But with 43% of parents admitting they haven’t opened one for their child, expanding access could unlock much better financial futures for more children across the UK.
Scottish Friendly’s research shows that 28% of parents would like grandparents to be allowed to set up a JISA to help give the child a financial leg up as they enter adulthood.
Some parents want to reform the rules even further to allow for other family members (9%), step-parents (6%), friends (5%) and even carers (3%) to have the ability to open a JISA on behalf of their child. All in all, over half (51%) of parents would like the rules relaxed to allow others to have the permission to open a JISA on behalf of a child.
The research also shows that 28% of the UK’s adult population would consider opening a JISA for a child that isn’t their own if the rules were changed. That rises to 31% for grandparents with grandchildren aged under 6 years old.
The research comes at a time when families are under growing pressure, with nearly a third (31%) of UK adults saving less than they were a year ago. This suggests that the rising cost of living (67%), stagnant wages (21%) and political uncertainty (13%) are making it harder than ever for parents to prioritise. And when it comes to investing, the rising cost of living (53%), stagnant wages (21%) and political uncertainty (15%) are the reasons behind making it harder for parents to prioritise investing.
Among parents who haven’t opened a JISA, the most common reasons cited were that they are saving through other means (27%), they hadn’t got around to it (25%) and being unable to afford it (21%).
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 UK are facing a perfect storm of rising costs, flatlining incomes and ongoing economic uncertainty – so it’s no surprise that saving or investing for a child’s future can sometimes fall down the list of priorities. We know from our own JISA data that on average, when parents do find the time to open a JISA, the child has already lost out on four 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 Junior ISAs need to reflect how families live and save today. 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:
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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.