Parents missing out on future savings for their children by opting for Junior Cash ISAs

New research from The Investment Association and Opinium has found that adults holding Cash ISAs are almost twice as likely to open a Junior Cash ISA than a Junior Stocks and Shares ISA (17% vs. 9%) for their children - meaning many are missing out on the long-term growth a Junior Stocks & Shares ISA could offer

Whilst money in a Junior ISA belongs to the child, they can’t withdraw it until they turn 18 except under exceptional circumstances. Cash ISAs can be helpful for those saving for immediate needs but investing on behalf of your child into a Junior Stocks & Shares ISA can offer stronger returns over this long-term period, helping to grow their wealth and protecting future savings from the detrimental impact of inflation.

What are parents saving for?

The top motivations for parents saving into a Junior Cash ISA are education (55%) and getting onto the property ladder (37%) – two areas that have long-term lifestyle implications for their children. Education (49%) and buying a first home (38%) also came out on top for parents who are saving into a Junior Stocks & Shares ISA.

However, if you had put £9,000 into a Junior Cash ISA 18 years ago with the hope your children would use it to fund a university degree or buy a first home, it would be worth £7,453 today in real terms, adjusting for inflation.[1] If this same amount had been invested in a typical global equity fund via a Junior Stocks & Shares ISA, it would be worth £20,802 today. Even with a more balanced approach to investing and a mixture of stocks and bonds, it could now be worth £10,150.

Although parents ultimately have no say in how their child spends the money in their Junior ISAs, almost 90% are confident that their child will use it for its intended purpose.

The investment knowledge gap

For parents saving only into a Junior Cash ISA for their children, over three fifths (62%) do so because they find the product easier to understand than a Junior Stocks & Shares ISA.

This is backed up by our awareness testing among cash savers - awareness that Stocks & Shares Junior ISAs exist is high (82%) but cash savers believe their knowledge of the wrapper is low with only a quarter (25%) claiming to know anything about the product.

Comparatively, almost three quarters (74%) of parents who have invested in Junior Stocks & Shares ISAs believe that doing so will give their child better long-term return than a Junior Cash ISA, highlighting a potential investment gap.

Setting your children up for financial success

Research has shown that the skills and values we need to manage money begin to develop between the ages of 3 and 7 – meaning parents’ financial habits and beliefs could rub off on their children.

Over a fifth of Gen Z (22%) and almost a quarter of Millennials (24%) were influenced by friends or family to start investing. Demonstrating investment growth through a Junior Stocks & Shares ISA could be an important step towards passing on valuable knowledge to your child about the power of compound growth, inflation risk, and the fact that ordinary people can participate in capital markets so that they can grow their investments to meet their long-term life goals.

The Investment Association is a proud partner of the Just Finance Foundation (JFF), a charity on an important mission to make sure every child is empowered with financial education for life. JFF work with schools, families and communities across the UK to deliver meaningful financial education to children from an early age.

Chris Cummings, CEO of the Investment Association and Chair of the Just Finance Foundation, commented: “Making use of the tax-free savings available through a Junior ISA is a great way to set your child up for later life, whether that’s funding education or training, getting a foot on the property ladder or starting a family of their own.

“Many parents are already taking advantage of Junior ISAs, but we would like to see more benefit from long-term investment through the Junior Stocks and Shares ISA. That’s why we’re calling on the government to introduce more effective financial education throughout life so that concepts including the power of compound growth and inflation risk are better understood, and families are set up to make informed financial decisions that benefit their futures.”

Sarah Wallace, Director of the Just Finance Foundation, commented:

“The conversations children hear at home, school and in the community have a big impact on their attitude towards money and finances.

“Our staged approach to financial education suggests starting to talk to children about money as early as possible, building strong financial knowledge and confidence that can be applied in the real world as they grow. Covering topics including attitudes to risk, inflation, long-term financial planning and financial decision-making are key.

“Educating more people about the benefits of saving and investing is an important part of our mission to build financial wellbeing across the UK. Junior ISA products can provide an important stepping stone to empowering the next generation and passing on positive financial habits.”

The Just Finance Foundation provides quality resources that support educators to introduce financial concepts to children from a young age. Their staged approach includes:

• Early Childhood (Ages 4–7): Introduce basic financial concepts, such as where does money come from and difference between wants and needs, through stories and hands-on activities.
• Middle Childhood (Ages 8–12): Build on earlier lessons by involving children in real-life financial decision-making. It’s important to help children develop critical thinking skills and an understanding of cause and effect – such as how different approaches to spending, saving and earning impact financial outcomes over time.
• Adolescence and Beyond: Expand understanding to focus on long-term financial planning, independent application and deeper financial literacy. This can include more complex topics such as investing and risk management.

This consistent, real-world focused approach ensures financial education grows with the individual, fostering practical skills and deeper understanding.

NOTES TO EDITORS

In 2025, the IA again partnered with Opinium to conduct a survey about saving and investing habits in the run up to the 2024/2025 ISA season.

This is the third year that we have conducted the survey and each year we have built on the previous year’s research to better understand the motivations and investing habits of UK investors as they think about their ISA allocations at the end of the tax year.

In 2025, we have also surveyed two additional profiles of people – UK Cash ISA holders and a nationally representative sample of UK adults. Our aim is to draw comparisons between Cash ISA holders and Stocks and Shares ISA holders to understand the barriers to getting Cash ISA holders to invest. 

The survey fieldwork took place between the 28 February 2025 and the 5 March 2025. 

We surveyed three groups: 

• 1000 UK investors 

• 1000 UK Cash ISA or Junior ISA holders 

• 2000 UK adults (18+) where the respondents were weighted to be nationally representative of the UK adult population 

For further information about the research, please get in touch with the IA press office.