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As families grapple with the escalating cost of living, nearly one million Junior Individual Savings Accounts (JISAs) went without contributions in the 2023-24 financial year, according to new data from HM Revenue and Customs (HMRC). The findings, analysed by Nottingham Building Society, underscore the stark reality many parents face: despite their best intentions to save for their children’s futures, everyday expenses are increasingly squeezing their ability to do so.
A Growing Concern
The analysis revealed that approximately 967,000 Junior ISAs saw no new funds added throughout the year, a significant increase from 869,000 in the previous year. Alarmingly, this means that around 40% of all Junior ISAs, which totalled 2,367,000, remained untouched. The figures indicate a pressing issue where families find themselves unable to prioritise long-term savings amid financial pressures.
Nottingham Building Society’s report highlights a troubling trend: while the total number of Junior ISAs has risen by 37% since 2020-21, the accounts lacking contributions surged by 45%. This disparity reflects a widening gap between parents’ aspirations for their children and the harsh reality of their financial situations.
The Financial Landscape for Families
The statistics reveal that only a small fraction of Junior ISAs are receiving significant contributions. In the 2023-24 financial year, just 78,000 accounts benefited from the maximum subscription of £9,000, accounting for a mere 3% of the total. Furthermore, an overwhelming 73% of accounts had less than £500 deposited, and 92% received under £2,500.
Harriet Guevara, the chief savings officer at Nottingham Building Society, expressed concern over these figures. “Junior ISAs are intended to provide families with a financial head start for their children,” she said. “However, these numbers suggest that a growing number of accounts are effectively sitting empty, and that’s a warning light.”
Pressures on Parents
The findings paint a clear picture: while many parents are motivated to open Junior ISAs for their children, everyday costs are making it increasingly difficult to contribute regularly. With two in five accounts receiving no funds, it becomes evident that the financial strain is real and pervasive.
Guevara emphasised the need for a shift in focus: “Child savings should not be a privilege for a select few. It is crucial that we make it easier for families to contribute, even if it’s just a little at a time. The system must be designed to foster genuine financial resilience rather than merely facilitating large contributions.”
Why it Matters
The data surrounding Junior ISAs serves as a poignant reminder of the challenges many families are facing today. As the cost of living continues to rise, the gap between aspiration and reality widens, threatening the financial futures of countless children. It is essential that policymakers and financial institutions recognise these barriers and work towards creating systems that empower parents to save for their children’s futures, ensuring that financial security is within reach for all families, not just a privileged few.
