Could you help your child or grandchild to become a Junior ISA millionaire?

ISAs are one of the most tax-efficient ways for you to save and invest your money each tax year, and the target of becoming an “ISA millionaire” is often high up on the list for many investors.

As you may well know, ISAs allow you to save or invest your money while shielding it from Income Tax and Capital Gains Tax (CGT). You can save and invest up to the ISA allowance each tax year, which is £20,000 in 2022/23.

You can use this allowance across a range of different kinds of ISA, but the most common options are typically to save through a Cash ISA, or invest in a variety of different assets in a Stocks and Shares ISA.

Interestingly, by using your full £20,000 allowance every year in a Stocks and Shares ISA then, assuming average annualised returns of 5% and no management charges, you would become an ISA millionaire in around 25 years.

You may be saving and investing for a child or grandchild in your life through a Junior ISA (JISA), too.

Junior ISAs provide an effective, tax-efficient way to build a savings pot for a child or grandchild to take control of when they reach age 18.

This may leave you wondering: if becoming an ISA millionaire is the ultimate goal, could you turn your child or grandchild into a JISA millionaire?

Read on to find out more.

You’d need annual average returns of 17.15%

Unfortunately, the overwhelming likelihood of your child or grandchild reaching millionaire status in a JISA by their 18th birthday is extremely low.

Even if you contributed up to the full £9,000 JISA allowance every year until they turned 18, you’d still need to rely on average annual returns of 17.15% to reach that £1 million marker.

This would be an extremely difficult feat for even the most experienced investor, especially to produce these returns every year for 18 years.

Even so, you can still make a huge contribution to your child’s financial future through a JISA.

Assuming an expected growth rate of 5% and no investment management charges then, by investing £9,000 into a JISA on the day they are born and every birthday, your child’s account could be worth £287,510 by the time they turn 18.

Bear in mind that this calculation doesn’t take inflation into account.

Giving a child the gift of financial freedom

While it may not make them a JISA millionaire, a sum of £287,510 could still be a great way to set your child or grandchild up for their financial future.

This money could be instrumental in allowing them to live the kind of lifestyle they want, safe in the knowledge that they have money invested if they ever need it.

Equally, it could allow them to meet some of their short-term goals when they reach adulthood. They might want to buy a first car, go on holiday with their friends as they finish school, or support themselves while studying at university.

They could even use it to put down a large deposit on a property, meaning they’ll be able to borrow less and so have a smaller mortgage on their first home.

Of course, if you encouraged them to hold onto their money and keep investing once they turn 18, then your child or grandchild could still become an ISA millionaire yet.

If your child or grandchild kept the money invested and then continued to maximise their full £20,000 ISA allowance every birthday, they could become an ISA millionaire in just another 15 years.

Again, this figure assumes annual returns of 5%, no management charges, and doesn’t take inflation into account.

So, while you’re unlikely to help them become a JISA millionaire, starting early could still put them on the path to becoming an ISA millionaire as an adult.

It’s important to remember that once they turn 18, your child or grandchild has full control over the account and can use it as they wish. That’s why it’s all the more important to encourage them to sensibly save and invest this money for their future.

Cash or Stocks and Shares?

A great feature of JISAs is that there are both Cash and Stocks and Shares JISAs available.

Cash JISAs allow you to build a tax-efficient pot without risking it in the stock market. Meanwhile, a Stocks and Shares JISA has the potential to generate returns, like the ones discussed above.

You’re even free to split the £9,000 JISA allowance between the two if you’d like, meaning you could make separate saving and investing accounts for your child or grandchild.

Work with us

If you’d like to find out more about how a JISA could help your child or grandchild to achieve true financial freedom for themselves, please get in touch with us at Rosebridge.

Email or call 01204 300010 to speak to us.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Calculations in this article made using’s investment calculator.



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