Meet the longer term Isa millionaires? How 78,000 youngsters had their Junior Isa pots stuffed to the brim

Tens of thousands of children had their Isa pots filled to the brim by parents, grandparents and guardians in the 2023/24 tax year.

Some 78,000 Junior Isas were filled with the maximum £9,000 allowance that tax year – the most recent HMRC data available – analysis by Nottingham Building Society shows. 

That represents 3 per cent of all Junior Isa, down from 4 per cent in the tax year before. 

It is likely since then the number of children receiving the full £9,000 allowance in their Junior Isas has grown. 

Junior Isas can be opened by the parents or guardian of children under the age of 18. The annual allowance is £9,000 and, as with adult Isas, money kept in a Junior Isa is free from tax. 

Parents can choose to stow this allowance in a cash version offered by most banks and building societies, a stocks and shares version, or a mix of both.

Junior Isa millionaires?: 78,000 Junior Isas were filled with the maximum £9,000 allowance in 2023/24 

> See the best Junior Isas and childrens’ savings accounts to open

Once a child turns 18, they can do what they wish with money kept in a Junior Isa on their behalf. Some will choose to keep investing it in a stocks and shares Isa. 

Filling a Junior Isa by the annual allowance £9,000 would put a child well on their way to being an Isa millionaire. 

If you opened a Junior Isa for a child when they were born and invested the annual £9,000 allowance in the stock market by the time they turned 18 the Isa would be worth £269,000, according to calculations by stockbroker Hargreaves Lansdown. 

This assumes a 5 per cent growth rate on the total deposits of £162,000 over the 18 years. 

But even investing £6,000 a year in a Junior Isa would leave a child with a near £180,000 pot by the time they turn 18. 

The average amount paid into Junior Isas is much lower than the £9,000 allowance, however, at around £1,350 a year. 

Stocks and shares Junior Isas tend to attract larger subscriptions, averaging £1,960 compared to £872 for an average contribution to the cash version of the account, according to stockbroker AJ Bell.

On the other end of the spectrum, almost one million child savings accounts received no contributions in 2023/24.  

Around 967,000 of the 2.37million Junior Isa accounts open received no contributions at all during the 2023/24 tax year. 

That means around two in five children with a Junior Isa saw no money added to their account over the entire year.

While more than 1.7million Junior Isas had less than £500 in them during the 2023/24 tax year. 

Harriet Guevara, chief savings officer at Nottingham Building Society, says: ‘When around two in five Junior Isas receive no contributions in a year, it points to the real pressure families are under. 

‘The data suggests many parents are opening accounts for their children with all the right intentions, but that day-to-day costs are crowding out long-term saving.