Thousands of parents and grandparents plan to pay into Junior ISAs in the coming tax year.
Junior ISAs – dubbed JISAs – have taken over from Child Trust Funds (CTFs) as the main way of saving for children, with parents, other relatives and friends able to save £3,600 a year into the accounts.
And like their adult equivalents, the Junior ISAs are not subject to tax, so no interest is lost to the taxman.
Figures from Triodos Bank show that one in eight (13%) parents plan to pay into a Junior ISA in the forthcoming tax year.
It means the young Britons stand to benefit from a potential Junior ISA nest egg of £3.7 billion, with each parent or grandparent planning to contribute an average of £1,017 this coming tax year.
The research has also cast light on how parents and grandparents would like their children to use their nest egg when they turn 18.
Nearly a fifth want their child/grandchild to maintain the tax-free savings habit, and continue saving into an ISA at 18, rather than spending the tax-free nest egg they've built up.
Over a third (34%) hope the child will use it for university, a similar number (32%) would like the money to be used for a house deposit, and 19% would like it to go towards seeing the world.
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