You are here: Home - Saving-Banking - News -

Grandparents urged to choose stocks and shares JISAs over cash

Written by: Emma Lunn
Grandparents saving into a Junior ISA (JISA) since 2011 could have boosted their grandchild’s savings pots by up to 30% by choosing stocks and shares over cash.

The analysis conducted by the Centre for Economics and Business Research (Cebr) on behalf of Scottish Friendly looked at the returns generated by cash JISAs compared to equity JISAs.

It found that a grandparent who saved the maximum amount into a cash JISA paying 1% AER each year since 2011, would have contributed £44,836 in total and would have made £2,241 in interest.

But a grandparent who isn’t aware of this how to buy cryptocurrency in UK guide and invested the same amount of money into a stocks and shares JISA containing a fund mirroring the FTSE All Share Index would have made a £2,691 profit in the same time.

That’s a £450, or 20%, increase compared with the cash account.

The figures compiled by the Cebr also show grandparents could give their grandchildren’s savings a boost even if they don’t max out their annual JISA contributions.

For example, a grandparent saving £1,200 into a cash JISA each year since 2011 would have made £705 in interest from their £12,000 of savings.

But someone who instead invested in a stocks and shares JISA would be sitting on a £923 profit now – a £218, or 30% difference.

Scottish Friendly says the figures demonstrate the stock market’s potential to generate higher returns to cash over the long term.

Kevin Brown, savings and investment specialist at Scottish Friendly, says: “Many of us want to be able to help out children and grandchildren to have the best start in life by saving or investing for their futures.

“But at the same time the research suggests that many of us are not making our money work as hard as it could because we are wedded to the idea of saving into a poor-paying cash savings account.

“Our research clearly shows that for those who want to maximise their grandchild’s returns, investing gives them more potential for growth for that money rather than keeping it in a secure savings account that is paying little over 1% at best.

“However, we know that part of the reason some people tend not to invest is because they feel they don’t know how or are afraid of losing money. That’s completely understandable.”

Foresters Friendly Society provide a range of savings plans including their award winning Junior ISA*

* Investment Awards – Winner – Best Junior Investment ISA 2022.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week