The kids are all bright

The kids are all bright

Key points

• Education and savings top the list for children with a Junior ISA lump sum

• Parents aren’t confident children will be sensible with a lump sum at 18

• Kids show better financial awareness than parents


Education and savings top the list for most children if they were given a Junior ISA (JISA) lump sum at 18 years old. However parents underestimate what their children would do with the money, according to research from Post Office Savings.*

Only 16 per cent of parents say their children would save most of the money when in fact, over half of children (52 per cent) say they would be sensible and save it. Furthermore, 46 per cent of under-18 year olds say they would put the money towards their education.  

How would you spend your JISA or other savings at 18 years old?

What children say

What parents think their children will do

Save most of it

52 per cent

16 per cent

Pay for education at university or elsewhere

46 per cent

46 per cent

Buy something big like a house or a car

39 per cent

42 per cent

Spend it on having fun

26 per cent

21 per cent

Give most of it away to friends/family/ charity

10 per cent

1 per cent

Spend it on holidays

19 per cent

17 per cent

The research reveals older teens have better financial awareness than parents as two thirds (66 per cent) of 16–18 year olds are aware a JISA (Junior Individual Savings Account) is a type of savings account, compared to just 50 per cent of parents. Over four in ten parents (42 per cent) say they do not know what a JISA is compared to just a third of children (33 per cent).
Richard Norman, director of savings and investments at Post Office, said: “Our research shows education and savings are top of mind for most children should they receive a lump sum of cash at 18 years old. The news is full of stories about the economy, and families are tightening their belts at home too. Evidently, this hasn’t escaped the attention of the younger generation and many are taking notice of what’s going on in the financial world. Rising financial awareness in a recessionary environment will hopefully ensure the younger generations grow to be financially savvy adults.”
Savvy parents raise savvy kids
Mums and dads intending to invest in a JISA are considerably more likely to trust their children than those not intending to. Of those planning to invest 71 per cent say they would trust their children to use a lump sum wisely, compared to just half (49 per cent) of those not planning to open an account for their children. 
It appears the vast majority of today’s children are potentially missing out on £64,800** worth of tax-free savings, as just a quarter of parents (24 per cent) plan to invest for their child’s future in a JISA.  Of those who won’t be investing in a JISA, four in ten (40 per cent) would prefer to save in to a traditional savings account, and six per cent say they won’t be saving at all. Of those who do plan to save in to a JISA, parents plan to put away an average of £1,236 a year – just 34 per cent of the £3,600 a year tax-free allowance.
Richard Norman said: “If parents want a tax efficient way of saving for their children, then Junior ISAs are a great way to save towards a child’s future. Of course not everyone can afford to invest the full amount, but every little helps. A traditional savings account should supplement the JISA allowance so parents can take the full benefits of tax-free savings.”

Other stats reveal:
• Nearly one in ten 8-10 years olds (nine per cent) think a JISA is a new type of phone.
• Low expectations for first wage: children expect their average salary from their first job to be £11,500 a year.
• Boys expect to earn nearly double what girls expect - £15,325 and £8,536 respectively.
• The gender divide extends to kids’ impressions of their parents’ earnings – both boys and girls think dad earns more than twice what mum does: £55,378 compared to £23,490.


Notes to Editors 

* Populus interviewed 704 parents of children aged under 18 between 13 and 15 January 2012. Parents were drawn from a Nationally Representative survey of 2,085 adults. Populus also interviewed 501 children aged 8 – 18 between 13 and 17 January 2012.
**If the maximum £3,600 were put into an ISA each year for 18 years, the total potential pot would be £64,800. 

Junior ISAs:

• There are two types of Junior ISA available in the market - a stocks and shares Junior ISA and a cash Junior ISA. You can only hold one of each type. Post Office offers a stocks and shares Junior ISA.
• The government sets how much can be invested in a Junior ISA each tax year. For the 2011/12 tax year this is up to £3,600 minus any contributions to a cash Junior ISA
 The Post Office Junior ISA:
• Can be opened by parents and guardians on behalf of children under the age of 16 who didn’t qualify for a Child Trust Fund.
• Can be opened with a regular Direct Debit from as little as £10 per month friends and family can make contributions too. Alternatively you can open with a lump sum of £500 or more.
• Is a medium to long term investment that offers the potential to benefit from the growth of the stock market. Contributions are invested in the Family Balanced International fund, which invests mainly in UK and overseas shares along with fixed interest investments.
• Tax efficient – any return will be free of income tax and capital gains tax.
• Only the child will be able to access the investment, and only from the age of 18.
• The child can look after the account themselves from the age of 16

To find out more about the Post Office Junior ISA or any other Post Office savings product go to
The Post Office has recently received the following awards for its popular savings range:
• Best Savings Provider – MoneySupermarket Supers Awards 2011
• Best High Street Savings Provider - Consumer Moneyfacts Awards 2011
• Best Savings Account for consistency of rates - Moneywise Awards 2011
• Best Savings Provider - What Investment Readership Awards 2011
• Best Fixed Rate Bond Provider - 2011 Moneynet Awards
• Best Fixed Rate Savings Provider - 2010 Moneyfacts Awards.

For more information, please contact:
Stuart Taylor         
Post Office Press Office        
02920 392 572
07715 480146                                                         


About Royal Mail plc
Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK’s designated universal postal service provider. UK Parcels, International and Letters (“UKPIL”) comprises the company’s UK and international parcels and letters delivery businesses operating under the “Royal Mail” and “Parcelforce Worldwide” brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.


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