Make your children rich: How to save thousands for their future without even noticing
Junior ISA: Nationwide explain benefits of setting up account
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With £733million put towards unwanted Christmas presents from Santa each year, parents could be gifting their children financial stability instead. Junior ISAs are designed to help the next generation become wealthy without hurting their parents’ pockets.
A study done by online investment service Wealthify found that 78 percent of parents said their child receives gifts they don’t want for Christmas.
This equates to roughly £264 wasted every year on toys and gifts that will never be used, and although Christmas is certainly a time for gifting, there are other ways to better provide for the future generations.
A Junior ISA, otherwise known as JISA, can be set up by a child’s parent or guardian to save long-term for their future.
A JISA works similarly to an adult ISA and can be held in cash or stocks and shares and while the latter may be more risky due to the investment aspect, Wealthify’s data suggests the risk can pay off.
If the £264 spent on unused presents every year was invested, a child could receive a gift on their 18 birthday of £6,589.
Wealthify estimates that even if half of this amount, £132, was invested in a stocks and shares JISA every year it could still be worth £3,294 by the time it matures.
Alongside this, Wealthify found that one in three parents with children aged under 18 said that on average, these unwanted gifts generally only last a month with only a fifth noting that they were able to last a full year.
The JISA alternative not only creates a more meaningful contribution towards the child at every milestone one contributes towards, but will clearly also last a lot longer than the well-intended but rarely used gifts.
However, parents themselves are not always to blame for the pile of dust-collecting Christmas gifts, as family and friends partake in the ritual spoiling of children every Christmas day.
This problem can also be solved, along with the constant ‘What do they want for Christmas?’ family debate before the big day as many JISA accounts have a family and friends option.
This account extra enables parents who have opened a JISA for their children to invite a wider circle of contributions from family and friends.
The study found 39 percent of grandparents, 12 percent of Godparents and 13 percent of family friends choose to gift money to these children anyway.
By inviting this circle to contribute towards the child’s future instead could see the heavy financial burden of college tuition taken off the shoulders of parents.
After all, they say it takes a village to raise a child and JISAs could be the best way to help that village support that child in the long-term.
Additionally, with Wealthify’s JISA, they offer the option for these extra contributors to leave a message with their contribution for the child when they turn 18, creating possibly the best montage of childhood memories and heartfelt messages as their 18th birthday present.
Meaning for every birthday, Christmas and visit to the grandparents that end with children buying far more sweets than they could ever get, the money could instead be put towards securing their financial future.
Wealthify also shared that this financially-friendly alternative to traditional gifting does its part for the environment too by negating the plastic and paper waste that comes with buying and wrapping unwanted presents.
Andy Russell, CEO of Wealthify, commented: “Christmas is a time for giving. But with our research revealing just how many presents go to waste every year, it’s obvious that some of us will be looking for an ethical alternative to present buying.
“Investing in a Junior Stocks & Shares ISA means you can help a child to achieve their dreams – much more meaningful than a toy that will be tossed aside after a month of use.
“Just think of it as a gift towards your child’s future, not just for Christmas!”
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