Oonagh Shiel wants her three children to develop good financial habits from a young age. For years, she has been using Junior Isas to teach them to invest their money.
“I make it a point of education with my kids that I talk about my investments, and I try to get them to invest rather than just trying to save money that might lose value over time,” she says. “I also try to empower them to really think about money as a force for good, and how they can influence companies.”
Shiel, 47, a project manager from north London, has been putting money into their Jisas and guiding them to make choices about where to invest the funds.
Up to £9,000 a year can be put into a Junior Isa. As with adult versions, there are cash as well as stocks and shares options.
Putting in £100 a month from the time a child is born would generate a pot worth almost £35,500 by the time the child turns 18, assuming investment growth of 5pc a year after fees, according to AJ Bell.
Even putting away £20 a month would generate savings worth more than £7,000 during the same period. The full £9,000 a year would yield £266,000.
AJ Bell’s Laura Suter says those who want a more “hands-off” approach can opt for a low-cost one-stop-shop fund, such as Vanguard LifeStrategy, and choose options that align with the level of risk they want to take.
Another option is to pick a low-cost global tracker, like Fidelity Index World Fund, which invests in thousands of companies around the globe for a fee of 0.12pc a year and can be used as a building block for the portfolio. Riskier funds can then be added on top.