Almost four in 10 parents with children under 18 are delaying saving for them, Scottish Friendly’s latest research has found.
According to the mutual’s Family Finance Tracker, 38% of parents with children under 18 have no junior ISA in place for any of their children, with everyday pressures and a lack of knowledge cited as barriers.
Among this group, more than a quarter (28%) said they simply ‘haven’t got round to it’, while 18% of those surveyed said they don’t know anything about JISAs and 12% said they have not had time to set one up.
To boost take-up, Scottish Friendly is calling for the rules around who can open a JISA to be changed. Currently, only a parent or legal guardian can open a JISA, although others can contribute once an account has been set up. Scottish Friendly believes relaxing the rules so grandparents and other family members can open JISAs would “remove some of the practical barriers”.
The firm’s research showed two in five (39%) UK adults said they would be likely to consider setting up a JISA for a child who was not their own if the rules allowed it.
Kevin Brown, a savings expert at Scottish Friendly, said: “The biggest barriers to good savings habits can often be the most ordinary ones. Many parents aren’t opposed to saving for their children. Instead, they simply haven’t got round to it, don’t know enough about JISAs, or have their hands full juggling the all-too-familiar demands of family life with young children.
“The problem is all about time since the earlier money is put aside, the longer it has to grow. Every year that passes before saving starts is a year in which that money has missed the opportunity to benefit from compound growth for a child’s future.
“Making it easier for grandparents and other family members to get started could help more children benefit from those early years of growth. For families already stretched for time and headspace, that could mean the difference between putting it off and giving a child a really meaningful financial headstart going into adulthood. That’s surely worth the effort of getting the rule tweaked – a small change that could make a big impact.”
Main image: ben-wicks-iDCtsz-INHI-unsplash
