UK households with 'modest savings' warned to 'move money' immediately

Mums and dads have been urged to consider opening a Junior ISA for their children. True Potential has warned if families max out a Junior ISA each year until the child turns 18, it could provide them with enough savings to buy a house.

It could also cover a three-year university course. If mums and dads open an account and put the max figure - an eye-watering £9,000 - in with a six per cent growth rate promised, it could leave them with £278,150.87 by the time the child turned 18.

Neil Rayner, head of Advice at True Potential, said: "Starting early and establishing a routine of saving regularly, even in small amounts, can significantly benefit your child's long-term financial health. It's important to set realistic goals—whether it’s helping them through university, buying their first car, or contributing to a house deposit.

READ MORE DWP rolls out Jobcentre changes affecting Universal Credit, PIP and more

"Our research shows that with wise investments, these goals are well within reach." Even parents who can only afford modest savings deposits could see good returns over time, with an investment of £50 a month growing to £19,000 by the time the child turns 18.

In the 2024 to 2025 tax year, the savings limit for Junior ISAs is £9,000. Your child must be both under 18 and living in the UK and if your child lives outside the UK, y our child can only get a Junior ISA if both the following apply: you’re a Crown servant (in the UK’s armed forces, diplomatic service or overseas civil service, for example) and they depend on you for care.

There are 2 types of Junior ISA: a cash Junior ISA, for example you will not pay tax on interest on the cash you save and a stocks and shares Junior ISA, for example your cash is invested and you will not pay tax on any capital growth or dividends you receive.