Following the arrival of the Royal Baby and in a bid to demonstrate the value of the tax efficient savings plans for kids, Willis Owen has analysed how much money could have been earned in ISAs opened for each of the Duke and Duchess’s children at birth.
Junior ISAs, also known as JISAs, are designed for young savers and like their ‘grown up’ counterparts allow customers to invest in either cash or stocks and shares. Children cannot access their stash until they are 18, but all interest earned is tax free.
Now Willis Owen has crunched the numbers and calculated that Prince George, born in July 2013, would today own a pot worth over £25,000 if his parents had invested the full ISA allowance in stocks and shares every year. His sister Princess Charlotte, who was born in May 2015, would have an investment worth £14,439.
Meanwhile, if the couple had opened a JISA for Prince Louis this week, it would be worth £4,614 by the end of the tax year.
However, you don’t have to be royal to take advantage of these investments, which currently have a savings limit of £4,260. With an average return of 8.3%, any parents who invested fully in a JISA when their child was born could earn more than £170,000, before costs are deducted, when their son or daughter reaches 18.
Jason Chapman, managing director at Willis Owen, said: “Scores of young adults use the money held in these tax-efficient products to help with tuition fees, buy a new car or as a deposit on a first home.
“For parents, keen to invest in their kids’ future, drip feeding contributions over time is typically the best way to build a sizeable return. For that reason, the message to any parent is that it’s never too early to start.
“Of course, as with any investment in the stock market, it is important to remember that the value of savings can go down as well as up.”