Thousands take to new Junior ISA’s
The results of a survey from Hargreaves Lansdown have revealed that 72,000 Junior ISA (JISA) accounts were opened in the first five months since the launch of the product in November 2011.
This led to £116m being invested in total, and the average account containing £1,614.
The way in which JISA’s have been managed has also been scrutinised, and the results show that 89pc invest in lump sums and 68pc invest in more than one fund. 25pc of people have been found to make regular contributions into the fund, while 15pc will invest regularly in lump sums.
While 72,000 may not sound like much, compared to the 6 million children that were eligible for a JISA in November, there are reasons why this product has experienced a slow start.
One of these is the age of the children eligible. As JISA’s are only available to those who are not born between September 2002 and January 2nd 2011, and are aged under 18, the age of the current children eligible is not prime for the savings and investment market.
For those born before September 2002, it is likely that if a parent is going to start saving for their child they will have done so already. Figures also show that age three is the prime age by which parents will have started to save for their children, and those born after January 2nd 2011 will still be aged one.
Another point to consider is the current economic climate. Although the importance of saving for the future has risen with costs of university tuition and general living rising, parents are finding it harder to find the spare money to save.
JISA’s are good products though, and have simply experienced a slow start, according to many industry professionals. The general consensus is that factors including the ineligibility of Child Trust Fund holders, as well as the UK recession have hindered their progress, and that 72,000 plans sold in the first five months is actually not that bad.
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