Most popular Junior ISA funds and stocks

Over the shoulder view of young Asian mother and daughter checking savings on smartphone via online banking.

(Image credit: Getty)

published 18 July 2023

A record £1.068 billion was paid into Junior ISAs during the 2020/21 tax year, according to the latest official figures.

A total of 943,000 Junior ISAs were subscribed to, as generous parents, relatives and friends paid money into children’s nest eggs.

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Sarah Coles, head of personal finance at the investment platform Hargreaves Lansdown, says: “Parents may be wary of investments, because they’re worried about the risk of losses. It’s hardly surprising, because when markets fall sharply it makes headlines, whereas when they rise over the long term nobody notices. It means we can overestimate the risk of market falls. And at the same time, we may underestimate the risk that money in a cash JISA doesn’t keep pace with inflation.”

According to Coles, investing a JISA has benefits beyond the potential growth too, because it can be used as a tool to get your child interested in the world of finance and investing. “If you talk to your child about their investments, they can build their understanding and interest in it. And they never need to worry about whether they’re the kind of person who invests, because they already do.”

Laura Suter, head of personal finance at the investment platform AJ Bell, comments: “Cash JISAs have continually been more popular, as parents either don’t want to take risk with their child’s savings or lack the confidence or time to invest. But more parents are choosing to invest for their children rather than just stick it in cash. This switch makes sense as children potentially have the longest savings horizon in which to ride out the ups and downs of the stock market to harvest higher returns.”

CTFs and Junior ISAs both have the same tax benefits and the same £9,000 annual limit. “However, if you keep your money in cash you can get a better rate in a JISA [currently 5.5%, with Beverley Building Society], and if you’re in an investment CTF, you may be paying over the odds in charges. Some investment platforms don’t charge JISA clients a fee for holding funds or shares.” These include Fidelity and Hargreaves Lansdown.

Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.

She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times.

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service.

Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.