By Jonny Courtaux of Courtaux Wealth Planning
The number of 25-year-olds who own their own home has been steadily dropping. Recent research from the Institute for Fiscal Studies shows that just 15% are homeowners, compared with 43% of those born in the 1950s and 60s, while 42% of those born between 1997 and 2001 are still living at home at 251.
It is a picture that will feel familiar to many families. And it is not just about buying a home. Add in driving lessons, help with a first car or university costs and it is easy to see why so many parents and grandparents want to give the next generation a helping hand.
Whatever the goal, there are several ways to build a nest egg for a child and you do not need a fortune to get started.
Start early and let time do the work
The biggest advantage when saving for a child is time. Even modest regular contributions can grow into a meaningful sum with many people choosing to invest money they won’t need to use for a number of years and are comfortable leaving it invested through the ups and downs in value.
For example, investing £200 a month from birth could grow to around £13,600 after five years and approximately £69,800 by the time a child turns 18, assuming annual growth of 5% net of charges. These figures are examples only and they are not guaranteed – they are not minimum and maximum amounts. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this.
Junior ISAs
A Junior ISA, or JISA, is one of the most popular ways to save for a child. Every child has their own annual allowance – £9,000 for the 2026/27 tax year – and growth or income within it is free from Income Tax and Capital Gains Tax.
A JISA can only be opened by a parent or legal guardian but,once established, anyone can contribute. The money belongs to the child and cannot be accessed until they turn 18, when it normally converts into an adult ISA and control passes to them.
Families can choose cash, stocks and shares or a combination of both. With a potential 18-year investment period, many choose stocks and shares for the possibility of greater long-term growth, although values can fall as well as rise, so returns are not guaranteed and you could still get back less than you invest. Please note, SJP does not offer a cash ISA.
Pensions for children
Starting a pension for a child might sound unusual but it can be a powerful long-term option. Up to £2,880 can be paid in each tax year, with basic rate tax relief increasing this to £3,600.
Because the money cannot normally be accessed until later life, it has decades to grow. Contributing the full £3,600 each year from birth to 18 could, using similar growth assumptions, potentially produce a fund worth more than £1 million by age 65, assuming an annual growth rate of 5%, net of charges. As before these figures are examples only and are not minimums or maximums. What you get back will depend on investment performance, and tax treatment of the investment and you could still get back less than you invest.
A pension is clearly not suitable for university costs or a first-home deposit but can provide long-term financial security.
Trusts and savings accounts
Trusts are another option, particularly where grandparents want to contribute more than a child’s JISA allowance. A bare trust has no upper investment limit but the beneficiary cannot later be changed, while discretionary trusts give trustees more flexibility over when money is released.
Discretionary trusts can be particularly useful for families with disabled or vulnerable children, although trusts can be complex and professional advice on their tax treatment is important.
For shorter-term goals, a children’s savings account can still work well and can also help youngsters learn about managing money. One point parents should be aware of is that where money they have gifted generates more than £100 a year in income, that income can be taxed on the parent. Please note that savings accounts are not available through SJP.
Grandparents can also play an important part. Gifts of up to £3,000 each tax year can fall within the annual Inheritance Tax gift exemption, while regular gifts from surplus income and some larger gifts can also be made tax-efficiently depending on individual circumstances.
There is no single right approach. The best mix of JISAs, pensions, trusts and savings accounts depends on what the money is intended for, how long it can be invested and how much control you want to retain.
What matters most is starting the conversation early. Even small, regular contributions can build into something significant by the time your child needs that helping hand.
For more information about saving for your children’s future, contact Jonny Courtaux at email hidden; JavaScript is required and visit www.courtauxwp.co.uk
You can follow Jonny Courtaux on Instagram at @jonnyc_wealth
Trusts are not regulated by the Financial Conduct Authority.
Courtaux Wealth Planning is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website https://www.sjp.co.uk/products.
SJP Approved 18/09/2026
Ref 1. J, Cribb and J, Michael and T, Waters. (2026). How do living standards compare across generations? [Explainer] Institute for Fiscal Studies.
