HMRC recently published its annual ISA statistical report. It is clear that Junior ISAs are becoming ever more popular with contributions up over 35% in 2024/25 (the last tax year data for which data is available) versus the previous year. However two things jumped out at me when I looked into the details for JISAs and Child Trust Funds:
- An ever increasing share is going into stocks and shares rather than cash
- A significant amount of money still sits in uncompetitive Child Trust Funds 15 years after they were replaced by Junior ISAs
So here’s what the data showed.
Stocks and shares JISAs growing in popularity
Junior ISAs were created by the Government in 2011 as a replacement for the Child Trust Fund. Parents could choose between contributing into cash JISAs, which pay interest on the amounts saved, or stocks & shares JISAs, where the contributions are invested and the returns depend on the performance of the investments. Children are allowed to hold no more than one of each type.
Initially parents chose cash JISAs for their contributions. For example, ten years ago in 2014/15, 70% of all contributions were made into cash JISAs with stocks & shares representing just 30%. As average contributions into stocks & shares accounts tend to be slightly higher, it was even more marked in terms of number of contributions.
But since 2020 we’ve seen a shift with over half of JISA contributions going into stocks and shares, and in 2024/25 it was over 60% with under 40% going into cash JISAs. What is interesting is that this has also happened during a time when interest rates have been higher.
So what’s going on? My sense is two things. Firstly people are increasingly knowledgeable about the risks and rewards of investing versus saving in cash, particularly over the long term. We’ve written about this before; although cash accounts can feel a safe place for child savings, investing can potentially result in higher returns albeit with the risk of values going up and down. This is something that the Government themselves is pushing, for example with the changes in adult ISA rules next year to encourage greater use of investing for long term saving.
I believe the second reason is that stocks and shares JISAs have become easier to understand and less daunting for less experienced investors. This is something Beanstalk has been pioneering by trying to demystify and simplify investing. Ten years ago, many stocks and shares JISAs were offered by providers aiming at more experienced investors with complicated fund choices and higher minimum contributions. We aimed to make things easier, whether it be the account opening process, fund choice or no minimum contributions and I believe this has helped new parents get onto the investing journey for their kids.
Money sitting in Child Trust Funds
For people who are unfamiliar with them, Child Trust Funds (CTFs) were a pre-cursor to Junior ISAs that existed from 2002 until 2010. The Government gave every child born in the UK a £250 voucher which had to be invested in a CTF and which was locked up until the child turned 18. Parents and others could also contribute and many did. The voucher scheme was abolished in 2010 and, although existing CTFs continued as a legacy product, no new Child Trust Funds could be opened.
As of April 5th 2026, there was over £8.5 billion sitting in Child Trust Funds with an average of £2,600 per account. Some of this is in accounts where the child has turned 18 but has not yet been withdrawn or claimed by the child but £5.3 billion is in accounts where the child is yet to turn 18.
The most popular form of Child Trust Fund was a “stakeholder account”. These were investment accounts in a form mandated by the Government which had a capped annual fee of 1.5% of assets under management. Not surprisingly, most providers set their fees at the level of the cap where many remain today. Many stocks and shares Junior ISAs have lower fees than this. In addition to offering many more features than CTFs such as round ups and cashback, Beanstalk’s, for example, is just 0.5% (plus 0.12%-0.15% depending on which fund you choose).
One is allowed to switch a Child Trust Fund into a Junior ISA to benefit from lower fees as well as the additional features and many customers of Beanstalk have done so. If all the stakeholder CTFs switched to Beanstalk, the collective savings would be £35 million a year or over £20 per average account per year! It is easy to switch and the existing provider has to allow it.
If you're interested in looking into the analysis yourself here's the link to the HMRC's Commentary for Annual Savings Statistics.