How £100 a Month Could Grow Into More Than £800,000 for Your Child
If you’re a parent, one of the questions that often comes up is: how can I set my child up for the future?
It’s easy to think in terms of savings accounts or a bit of cash put aside for when they turn 18. But what if there was a way to give them something far more powerful - a pot of money that could grow for decades and potentially change their retirement?
Here’s how it works.
Start with a Junior ISA
The moment your child is born, you can open a Junior ISA (JISA). It’s a tax-free savings and investment account designed specifically for children.
Let’s say you start contributing £100 a month from birth until they turn 18. That’s 18 years of contributions, totalling just under £22,000.
What Happens at 18
At 18, the JISA automatically becomes an adult ISA in your child’s name. Most parents worry at this point: what if they just cash it all in?
That’s possible, but if instead the money is kept invested, something powerful starts to happen.
The Power of Compounding
From age 18 to 60, imagine they never put in another penny. The money just stays invested.
If it grows at an average of 7% a year (a reasonable long-term assumption for stock market returns), that original £22,000 could snowball into around £810,000 by the time they reach 60.
And because it’s inside an ISA, the entire pot is tax free - no income tax, no capital gains tax, no dividend tax.
A Modest Start, a Big Future
That’s the power of starting early. £100 a month, stopped after 18 years, can grow into a retirement-sized nest egg. It’s not about giving them money to spend at 18, it’s about giving them financial security for their future.
Final Thought
A Junior ISA isn’t just a savings product. Done right, it can be a way of passing on one of the most valuable gifts possible: time. Time for money to grow, compound, and build a future that supports your child long after you’re gone.
A Few Important Notes
Investments can go up and down. Returns are not guaranteed, and your child could get back less than you put in.
The £814,000 figure is just an example based on 7% growth, not a promise.
Whether this strategy is right depends on your circumstances, and you should always check what’s affordable and sustainable for you.
This article is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
The taxation of the investment is dependent on the individual circumstance of each investor, and may be subject to change in the future.