I grew £250 into £50,000 for my child – this is how to save thousands for your kids and how to stop them blowing it all. Like any parent, Scott James wants to give his daughter Holly the best head start in life that he can afford. That's why Scott started saving for his daughter when she was just six months old. He stashed away £50 a month – and now 16 years later, Holly's pot has grown to an amazing £50,000. Here's how he did it – and how YOU can too. Scott's journey saving for Holly began with £250 free cash from the government. A special savings account, called a Child Trust Fund (CTF), was automatically opened for Holly shortly after she was born. CTFs are a type of tax-free savings account opened for kids by the government. It came with a voucher worth between £250 and £500, depending on your household income, and encouraged parents to save for their children. Scott says: "We’ve always saved and wanted to do the same for our daughter’s future. So when the government started to give away free money, it seemed stupid not to accept it." He paid around £50 a month, or £600 a year, into the account. Five years later, in 2014, Scott decided to transfer Holly’s savings into a stocks and shares Junior ISA (JISA) instead, so he could grow Holly’s savings on the stock market. JISAs replaced Child Trust Funds in 2011. You can pay up to £9,000 a year into them. There is no tax to pay on interest earned on your cash, or gains made on your investments. You control the pot, but that changes once your child turns 18 – from this point, they can access their cash and spend it. These accounts are incredibly popular, with around 1.37 million opened in 2023/2024, up from 1.25 million in 2022/23, according to the most recent figures. Scott continued to pay £50 a month into the account and Holly’s grandparents also added £500 a year. Scott said: "It’s been helpful to have Holly’s grandparents gift her money for her future and they liked being able to contribute towards a savings pot for when she is older." Although Scott stopped paying into the account in 2020 due to financial struggles during the pandemic, its returns have continued to increase. He later transferred the account to AJ Bell and picked higher-risk investments for Holly to get a better return. This helped him boost Holly’s pot by 120 per cent in just one year. "I opt for high-growth investments," Scott explains. "These can fluctuate more, so they are deemed riskier than bonds." Scott invested Holly’s money in Allianz Technology Trust, which has grown by 462 per cent in the past five years. She is also invested in the L&G Global Index 100 fund, which is up 116.6 per cent over the same period. Meanwhile, her investment in Fidelity Index World has grown by 82 per cent in the past five years. Now, Holly’s savings have grown into a healthy nest egg worth £50,000. "I’m so happy that I’m lucky enough to be in this situation and be able to give her money to start her off in whatever she chooses to do," Scott says. How do you get incredible returns just like Scott? Here’s the top-performing Junior ISAs and what YOU need to do to open one now. How YOU can pick a winner There are two types of ISA – cash or stocks and shares. A cash ISA pays you interest on the money you save into the account, while a stocks and shares ISA invests the money into the stock market. Stocks and shares JISAs are higher risk but can give you a better return. Meanwhile, cash JISAs are popular with parents who may not want to risk losing their child’s cash on the stock market. A whopping £1.8 billion was paid into JISAs in 2023 to 2024, around 63.6 per cent of which was in stocks and shares, while 36.4 per cent was in cash. Opting for a stocks and shares JISA may be a better option to make your kid’s cash work harder, says Marianna Hunt, personal finance specialist at Fidelity International. "Starting early allows compound growth to do much of the heavy lifting, turning relatively small monthly amounts into something far more substantial over time," she says. "Children have time on their side when it comes to investing – so they can ride out the rises and falls in the market, she adds. You can open a junior stocks and shares ISA with investment platforms such as Hargreaves Lansdown and Fidelity, or high street banks including NatWest. The exact amount you need to open an account varies depending on the provider, but you can often get started with just £25. Make sure to compare the annual fees before you open an account. Most providers will charge you a percentage of your total investment. BlackRock currently has the lowest JISA charges of any provider, at 0.9 per cent. In comparison, the most expensive provider is Hawksmoor Investment Management, which charges 2.28 per cent. The difference would cost you an extra £82 a year based on a pot of £6,000. But make sure to check if there is a minimum charge. Most providers will also give you options for how involved you want to be in choosing where your money is invested. You can choose between funds, stocks and shares, investment trusts and bonds or leave it to the experts by choosing a ready-made investment. A ready-made investment could be a good option if you don’t know where to start. Several ISA providers offer ready-made portfolios, which are managed by investment managers. Among them is NatWest, which has five ready-made funds that vary in risk from Defensive and Cautious to Ambitious and Adventurous. Interactive Investor and Hargreaves Lansdown both also offer ready-made investments. But remember, the return you could get on your investment depends on how the fund performs. Don’t worry about trying to find the best time to invest your cash. Time in the market is better than timing the market and the longer you invest the more time your cash has to ride out any peaks and troughs. How to make sure your kid doesn't blow their cash AFTER all your hard work saving up a nest egg for your child, there's the risk that once your kid gets their hands on the cash, they will blow it all. Once your child turns 18, they can access their pot – and technically spend it on whatever they want. That’s why it’s essential to have conversations with the kids when they’re an early age. It’s a great opportunity to share how their pot is growing – and talk about what you intend the pot to be for. When they’re close to turning 18, start having serious chats about how they will spend the money. If you’re still worried about your kid blowing the cash, you could save inside an ordinary stocks and shares ISA under your name. That way, you can set aside a certain amount of cash for your kid in your own account. That way, you still have control of your cash – and ensure that it’s not blown on a holiday to Ibiza. Grow £50 a month into £16,237 The best way to build up a nest egg for your child is to invest little and often, like Scott. Camilla Esmund, senior manager at Interactive Investor, said: "With several squeezes on our finances, saving for our little one’s future might not always take priority, but the good news is that even small amounts, regularly, can make a big impact over time. Especially if you’re keeping a close eye on the fees you’re paying." For example, investing £50 a month into a stocks and shares JISA from the day your child is born would give them £16,237 by the time they turn 18, according to Fidelity International. This assumes that their investment grows by 5 per cent each year and there is a 0.75 per cent annual management charge. But if you are lucky enough to be able to set aside £150 a month, then your child could have a £48,712 nest egg by the time they reach their 18th birthday. Top-performing accounts you can open NOW When comparing stocks and shares JISAs it’s important to look at where they are invested, as well as the minimum deposit you need to put in and any ongoing fees. Use a comparison website such as MoneySuperMarket or Which? to do this – but remember that past performance is not an indicator of how well a company will perform in the future. We have used comparison website NatWest Cushon to put together a list of the top-performing stocks and shares JISAs that you can open now for your child. We’ve calculated the figures to show how much the account would be worth if you paid £100 into it every month for five years. Among the top JISAs it recommends is the Fidelity Multi Asset Allocator Growth W Acc Junior ISA. The fund aims to increase the value of your investment over five years by investing money globally in assets with different levels of risk. The JISA is expected to give you a return of 5.02 per cent, turning £6,000 into £6,834 over five years. But if the investments perform well, then you could get a return of 10.39 per cent, giving you £7,902 over the same period. If you can’t afford to pay in that much, then you could still see a healthy return with just £50 a month like Scott. The JISA is expected to turn £3,000 into £3,419, or £3,953 if it performed well. The JISA has a yearly charge of 0.99 per cent, which would cost £59.40 a year on a £6,000 investment. Meanwhile, the CT Universal MAP Balanced C Acc ISA aims to provide long-term growth by combining capital and income. The fund is expected to provide a return of 4.94 per cent, which would turn £6,000 into £6,821 after five years. Or if it beats expectations, then it could give you a return of 10.35 per cent and leave you with £7,892 after five years. It has an annual charge of £64.80 a year. RECOMMENDED STORIES If you’re thinking of opening an account for your child, then Scott says it’s a “no-brainer”. He said, “I’ve made a few changes over the last five years, but no additional money has been added, and the account continues to grow.”
