How many teens keep their Junior ISA at 18?

Parents considering investing for their children may be encouraged by new data from AJ Bell, which found that kids aren’t plundering their ISA savings as soon as they get their hands on the money.

One of parents’ biggest worries when opening a Junior ISA for their child is that when their child turns 18, they get control of the account and can do what they want with it – including spending it all.

It’s far more common for young investors to continue to contribute to their ISA than to blow their Junior ISA savings.

What the data reveals

We looked at what people did in the first year of getting their hands on their Junior ISA money and found a third have continued to top up their ISAs, looking at accounts that have matured since 2023.

This compares with fewer than one in 10 who withdrew more than half of their savings pot within a year of taking control of it.

Any parent worried their child might cash in the whole thing in the first year of having control of their ISA can also rest assured that this only happened with 6.5% of accounts in the past two years.

These figures look at the more extreme scenarios – many 18-year-olds are far more likely to adopt a combined approach, perhaps withdrawing some money to fund travel, further education or other spending plans, but keeping the rest invested for the future.

How much could you make?

Junior ISAs are one of the best tools for parents hoping to set their children up for later life through long-term investing, but the prospect of gifting children a large sum of money when they turn 18 can be daunting.

This data proves that these concerns shouldn’t deter parents and grandparents from sticking a bit of money aside for their kids or grandkids.

Even investing a small amount regularly, or a one-off modest lump sum when the child is young, could see that money flourish over the years.

Putting away £500 a year for a child from birth could see them turn 18 with a portfolio worth almost £15,000, based on a 5% annual investment return including charges.

Likewise, if you made one lump sum investment in a Junior ISA worth £1,000 for a child when they are born it could more than double in 18 years.

The key thing for parents thinking of investing for their children to remember is that the sooner they start, the better, even if they can only afford a small amount of money.

Grandparents, friends and family could also get involved and send money to a child’s Junior ISA up to the £9,000 annual allowance, meaning it doesn’t have to be seen as a solo project for parents.