Amounts held in Junior Isas ‘given boost from parents making lockdown savings’
Some parents may have been funnelling money saved during the coronavirus lockdown into their children’s savings accounts, figures suggest.
Investments company AJ Bell said that between April and June, there was a 113% increase in the number of people paying into a Junior Isa when compared with the same period last year, according to figures taken from its Youinvest customers.
Average subscriptions per Junior Isa have increased by 26% or £473, from £1,853 to £2,326.
Laura Suter, a personal finance analyst at AJ Bell, said a large increase in the Junior Isa allowance in April this year may have also encouraged people to put more money in these accounts, which children can unlock when they turn 18.
The Junior Isa annual allowance was increased from £4,368 last year to £9,000 in the 2020/21 tax year, which started in April.
While many families have been struggling to get by on reduced incomes in recent months due to pay cuts, furloughing and job losses, some who have managed to maintain their income may find they have had extra spare cash left over due to not having to pay their usual outgoings during the lockdown.
Ms Suter said: “Lots of people have found they’ve saved money during lockdown, whether that’s not paying for commuting costs, the cost of childcare disappearing, not going on the family holiday or just going out less.
“While it would be tempting to save this money to splurge once the pandemic is fully over, some savvy parents are clearly putting the money away for their children’s future.”