Only 7% of Junior ISAs cashed in at age 18

Laura Suter
4 December 2018

AJ Bell analysis of Junior ISA customers who reached 18 in the past year shows:

•    Only 7% cashed in their Junior ISA savings
•    Parents are opting for well-known and proven fund managers
•    15% of Junior ISA savings held in cash

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“Parents starting saving when their children are young can afford to take a bit more risk with their investment choices, as they have time to ride out the highs and lows of the market. However, it’s understandable that some parents will feel nervous about putting the money for their children’s future in anything too high-octane, and instead opt for mainstream investments. 

“Everyone wants to peek inside other people’s portfolios, and see how they are investing. Our data looks at the portfolios of those Junior ISA customers who reached the age of 18 in the past year. It shows that parents wisely opt for well-known managers and funds that have proven their worth over decades, with Terry Smith, Nick Train, and Neil Woodford being popular picks, as are Scottish Mortgage, Witan, City of London and Stewart Investors Asia Pacific Leaders.

“Any parents putting money away in a Junior ISA need to be aware that the money is the child’s when they reach the age of 18, and they can decide whether to keep it invested or cash out and splurge the money. However, research of our customers shows that only 7% of Junior ISAs are cashed in when the child reaches age 18 – and some of these are likely to be at the parents’ say so. 

“Around 15% of Junior ISA money is in cash. Partly this may reflect the fact that the customers we looked at are nearing age 18 and their parents may have moved to cash in anticipation of them using the money or cashing out the ISA. This is a wise strategy if you know that the money is going to be spent soon, on university fees, to buy a car or even for a house deposit, for example, to stop a stock market fall in the months before you plan to cash in hurting your savings pot. 

“However, a reliance on cash is a perennial problem with Junior ISAs – last year parents saved £514m in cash Junior ISAs, compared to £388m in investment Junior ISAs. Unless you only start saving into a Junior ISA when your offspring is in their teenage years the account is the ultimate long-term vehicle, making it ideal for investments.

“Parents whose children reached 18 this year could have saved a maximum of £31,468 into a Junior ISA per child if they had maximised the allowance each year since they were launched in 2011, or up to £39,668 if they had used the Junior ISA predecessor the Child Trust Fund.

“That £31,468 would have grown to £39,181 if you had earnt 5% interest after charges by investing the money. If instead you had left this money in a cash account earning just 2.5% you’d have £35,106 – missing out on more than £4,000.”

Most popular investments in Junior ISAs for investors who turned 18 during the past year:


Investment trusts


AJ Bell Passive range

Scottish Mortgage


Vanguard LifeStrategy range

Woodford Patient Capital


Fundsmith Equity

Finsbury Growth and Income


Woodford Equity Income

F&C Global Smaller Cos


Lindsell Train Global Equity

RIT Capital


Stewart Investors Asia Pacific Leaders



Henderson Smaller Cos

Baillie Gifford Shin Nippon


Rathbone Global Opportunities

Biotech growth trust


Jupiter European

Lindsell Train

Sirius Minerals

Artemis Global Income

City of London


Source: AJ Bell Youinvest customers

Laura Suter
Personal Finance Analyst
Laura Suter is personal finance analyst 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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