Junior ISA turns 10 – what could you have made and where are parents investing?

Laura Suter
25 October 2021

As the Junior ISA approaches its tenth anniversary on 1 November, Laura Suter, head of personal finance at AJ Bell, looks at how much investors could have made for their children and which funds are most popular: 

“Many things haven’t changed in the past 10 years since the Junior ISA was launched – back in 2011 Adele was topping the charts, Kim Kardashian was getting divorced and we were all experiencing rising inflation and continual talk of an interest rate hike. However, parents who were savvy enough to use a Junior ISA to start a savings pot for their children could have built up almost £75,000 for their child during that decade.

“One thing that has changed dramatically is the amount you can put away in your child’s Junior ISA each year, rising from the original £3,600 to £9,000 today. It means that parents with money to spare can build up a very sizeable pot for their kids by the time they reach their 18th birthday. For a child born today, if you put away the full £9,000 a year and assume 5% growth, you could have more than £265,000 by their 18th birthday – definitely a birthday gift your child will thank you for.

“Despite now being a decade old the popularity of Junior ISAs hasn’t waned. Contributions to JISAs have increased in popularity in the past couple of years – the pandemic means that some parents have found themselves with more spare money that they’ve decided to stash away for their kids.”

Junior ISA annual limits since launch

Tax Year

Junior ISA limit

April 2011-12


April 2012-13


April 2013-14


April 2014-15


April 2015-16


April 2016-17


April 2017-18


April 2018-19


April 2019-20


April 2020-21


April 2021-22


How much could I have made?

A parent who invested the full Junior ISA allowance each year in the FTSE All Share index would have a pot worth £74,469 today*, based on total contributions of £53,386. If they’d just kept that money in cash earning 1% interest a year it would have grown to £56,641 – meaning their child would have lost out on almost £18,000 of growth during the past 10 years.

Not all parents can afford to put in the full amount each year, but if they paid in £100 a month since the JISA launched in 2011 and invested it in the FTSE All Share they’d have a pot worth £16,316 today. That same £100 a month contribution in cash earning 1% would be worth just £12,680 – £3,636 less.

If you’d been a particularly savvy parent and foreseen that the Baillie Gifford Global Discovery fund would have been the top performing global fund of the past 10 years, you could have put the first JISA allowance of £3,600 in on November 1st and with no further contributions turned it into £26,451 today. If you’d done the same with cash at 1% it would only have grown by £416.41 during that time.

* Assumes they made the first contribution on 1 November 2011 and then subsequent contributions on the first day of each tax year.

How rich can I make my child?

Getting your child’s JISA to megabucks status is a little easier now that the annual contribution limit has shot up to £9,000 a year. Assuming you have a spare £9,000 each year and you paid into your child’s JISA from their first year and invested it, earning 5% a year, you’d have £265,851 by their 18th birthday. During that time you would have contributed £162,000.

If you have more modest amount of spare cash each year (or more than one child) you can still generate a decent pot for them to use as a house deposit or for university. By investing £100 a month, starting from their birth, and earning 5% growth, you can build up a pot of £35,447 as an 18th birthday present.

If you wanted to aim for a nice round number, then contributing £1,700 a year, with it earning 5% growth, would give you just over £50,000 when your child hits their 18th birthday – which is also the average amount of debt a university student has or a very health deposit for a first property.

Where are the parents investing?

Everyone wants the chance to peek inside other people’s portfolios and see where they’re investing and our data shows that parents are generally investing their kids’ money pretty savvily. 

Perennial favourite Scottish Mortgage is the most popular investment and its recent returns of 202% over the past three years and 1,135% over the past 10 years mean children will thank their parents for including it. The investment trust’s choices of future tech giants and investments in unlisted companies mean that it’s a good long-term option for those who have a long time until their child reaches the age of 18. 

Terry Smith is clearly a favourite among parents with both his Fundsmith Equity and Smithson Investment Trust making it into the most popular investments. Fundsmith Equity has rewarded children well, returning 65.9% over the past three years compared to the MSCI World index’s return of 51.6%. Meanwhile the new Smithson trust has returned 85.7% over the past three years compared to its peer group return of 69.9%. The logic of getting global exposure to growing companies is sound for parents investing with the money locked up for potentially 18 years. 

There are a number of broad global trackers in the most popular investments too, with parents getting cheap access to global markets through the iShares MSCI World ETF and Fidelity Index World, or to US markets via the two S&P 500 trackers. 

Many parents prefer to plump for a one-stop-shop fund, which is why the Vanguard LifeStrategy funds appear regularly in the most popular funds. The most popular option was LifeStrategy 100%, showing parents willingness to take a bit more risk with the JISA investments as they are in it for a long time. 

One investment that might shock people is Tesla, meaning that a lot of parents are putting their children’s savings in the most debated car manufacturer around. But the logic here is surely the same as owning Scottish Mortgage, betting on the trends of tomorrow – of which electric cars is definitely one. 


Scottish Mortgage Investment Trust

Fundsmith Equity Fund

Vanguard Investments Lifestrategy Funds*

F&C Investment Trust

iShares MSCI World Ucits ETF

iShares Core FTSE 100 ETF

Fidelity Index World

Tesla Motors

Lindsell Train Global Equity

Vanguard FTSE 250 ETF

Vanguard S&P 500 Ucits ETF

Lloyds Banking Group

Smithson Investment Trust

iShares S&P 500 ETF

Monks Investment Trust

Source: AJ Bell. *All mentions of different Vanguard LifeStrategy funds have been condensed into one entry.

How should I invest my child’s money?

“What you invest in depends on how old the child is and how much risk you want to take, as well as how much money has accumulated in the account. If there’s only a small sum of money in the account you could be better sticking to one fund that’s well diversified, rather than spending a lot on fees buying lots of different funds. You could use a cheap global tracker fund, like Fidelity Index World, which tracks the MSCI World index giving exposure to lots of companies around the world at a low cost of just 0.12%.

“If there’s more money in the pot you could use these funds as your base and then add to them, depending on what kind of investments you want to make. For example, you could opt for a higher risk investment in emerging markets, if you have a long time until your child turns 18, or you could add in a UK-specific fund to get more access to UK markets.

“It’s also a great idea to get children involved to get them engaged in finances from a young age. Teaching them about how to put money away regularly and where the money is invested is a good way to start discussions about saving early on.

“One of the worries parents have with Junior ISAs is that the money becomes the child’s when they reach their 18th birthday, meaning they can cash it in and spend it all. However, our research shows just 7% of AJ Bell Youinvest JISA customers cashed out when they reached the age of 18 – so the concerns that many parents have that their kids will squander the money appears largely unfounded.

“If the child is nearing their 18th birthday it’s a good idea to have a discussion with them about what they might want to do with the money, whether they want to keep it saved for future or whether they have a sensible plan for it now. If they want to keep it saved they can transfer it to an ISA, either cash, stocks and shares, innovative finance or lifetime. Any transfers won’t count towards their annual ISA subscription.”

Laura Suter
Head of Personal Finance

Laura Suter is head of personal finance at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.

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