How to generate a £50,000 Junior ISA to pay for university or a house deposit


The last thing most sleep-deprived new parents want to think about is starting a nest egg for their new addition, but if you find time in those hectic first few years to start putting away even a small amount each month it can really add up by the time they turn 18.

The average graduate leaves university with £50,000 worth of debt*, which seems like an eye-watering sum for many parents to save. Meanwhile, the average UK house price is £235,000**, meaning a 10% deposit will set someone back £23,500 – although this will be much higher in pricier areas.

But parents don’t need to despair, by starting early, setting up a regular saving regimen and taking the time to invest, it’s possible to build a pretty impressive 18th birthday present for your offspring.

The Early-Starter

Parents who remember to open a Junior ISA during the early months of having a newborn baby will be rewarded by having more time for the pot to gather returns, which means they might not need to invest as much each year.

Someone who opened a Junior ISA in the first year of the child’s life will need to pay in £1,900 a year until they reach age 18 to get to the magic £50,000 figure, assuming 4% growth after charges each year. If you wanted to save the £23,500 needed for the average house deposit by their 18th birthday you’d need to pay in almost £900 a year, or £75 a month.

If you have more disposable cash and want to put in the full Junior ISA allowance (we’ve assumed the current rate of £4,368 each year, although this will increase with inflation), you will need to contribute the full annual allowance for the first seven years of the child’s life if you’re planning on covering the university debt. Then you can leave the pot to grow, and assuming the same 4% growth figures, it will reach £55,235 by the time they reach the age of 18. If you’re aiming for a pot of £23,500 you only need to pay the full allowance in for the first three years, then you can leave the money to grow and it’ll reach £25,538 by their 18th birthday, assuming the same 4% growth figures.

The Fifth Birthday Starter

There’s no doubt that the early years of a child’s life are a pricey time, from buying a pram, to the cost of soft play through to paying for childcare, so it’s understandable new parents might not have spare cash to stash in a Junior ISA.

If they start saving when the child starts school, at age 5, they need to put £2,900 a year away until they reach the age of 18 to have a £50,000 pot to pay for university. On the child’s 18th birthday they will have £50,147, assuming that same 4% growth after charges. To get to £23,500 you’d need to contribute £1,375 a year, for every year from their 5th birthday to their 18th birthday.

If parents get the savings bug at the age of five but want to put the full Junior ISA allowance in, they need to pay in until the child reaches the age of 13, at which point they will have contributed £34,944 which will grow to £50,926 by the time they reach their 18th birthday. To get to £23,500 you’d have to put the full allowance in until their ninth birthday, after which the pot will carry on growing at 4% a year to reach £27,456 by their 18th celebrations.

The Latecomer

What about those parents who totally forget to open the Junior ISA, or just haven’t had the spare cash to put money away? Well to get to the £50,000 pot you’d have to start paying in when your child is nine, put the full £4,368 allocation away each year and you can still almost reach the crucial sum by their 18th birthday – when you will have a pot of £48,075, assuming 4% annual growth. To get to the £23,500 sum you could wait until they’re 13 and then pay in the full allowance, and still get to £24,604 by their 18th birthday.

How to get to £50,000 by age 18

  Starting age Annual investment required Fund value at age 18
The Early-Starter 0 £1,900 £50,675
The Fifth Birthday Starter 5 £2,900 £50,147
The Late-comer 9 £4,368 £48,075

Assumes 4% investment growth per annum after charges

How to get to £23,500 by age 18

  Starting age Annual investment required Fund value at age 18
The Early-Starter 0 £900 £24,004
The Fifth Birthday Starter 5 £1,375 £23,776
The Late-comer 13 £4,368 £24,605

Assumes 4% investment growth per annum after charges

*Source: Institute for Fiscal Studies - Higher Education funding in England: past, present and options for the future

Find out more about our Junior ISA


These articles are for information purposes only and are not a personal recommendation or advice.

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Written by:
Laura Suter

Laura Suter is Personal Finance Analyst at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.