Stocks & shares JISA: Couple on why they use it to save for their children | Personal Finance | Finance
Mr Gould and his wife Polly opened a JISA for both their children – Jessica, 5, and Ellie who is only nine weeks old – when they were born, with the aim of building a nest egg for the two girls. However, as interest rates bottomed out, the couple opted to exchange the girls’ cash JISA for the possibility of a better long-term result with a stocks and shares JISA.
Mr Gould, Head of IT for Bibby Marine Ltd, and Mrs Gould, on maternity leave from her job at Warrington NHS Hospital as a midwife, currently contribute £50 monthly into each child’s account along with additional top ups from grandparents.
“I first opened a cash Junior ISA with Nationwide for Jess when she was born as I wanted a protected way of putting something aside for her.
“However, interest rates aren’t great, in fact they’re pretty awful! This is great for debt but I want to be able to try and make a difference for my girls when they grow up,” Mr Gould said.
For a lot of young parents, these interest rates seem detrimental when it comes to helping their children build a future.
This is what prompted Mr Gould to search for other options to ensure inflation wouldn’t start eating into his daughters money before they could even use it.
He continued: “I chose Beanstalk’s Junior ISA in part because as a family we’ve used KidStart for cash-back on our online shopping for years, so it naturally made sense to use the same system.
The pair also top up the JISA with round ups during the month.
“With not really carrying cash anymore I was making more and more of my everyday purchases using my contactless debit card, so rather than putting change in a piggybank I’m investing it in the children’s JISA.”
The app is notably user-friendly and contains a variety of tools that are ideal for people in a similar situation to the Gould family.
“Via the app, we invited their grandparents to contribute and they’ve really liked being able to be part of building Jess and Ellie’s futures – particularly at a time when families have been kept apart and contact has had to be limited.
“The ability to quickly and easily make one-off top-ups via the Beanstalk app is also a real advantage and means that when someone has given them money at an event or for their birthday, we can put that straight into their JISA along with a note saying who the money is from – so when Ellie looks back in 18 years at her maturing Junior ISA, she’ll be able to see where her life savings have come from.”
The highest interest rate for cash JISA’s in the country is two point five percent whereas shares across the UK have average growth rate of five percent.
Despite what many believe, a stocks and shares JISA does not necessarily require a wealth of knowledge about the investing sector.
“I don’t pretend to fully understand everything about stocks and shares, and this perhaps is part of the reason why, when Jess was born, we naturally defaulted to a cash JISA.
“I’m very much into planning and not been too risk adverse so have gone for a 60:40 split – but I also know I can adjust the balance any time I like within the app.
Mr Gould also shared his hopes for what the money in the girls’ JISA could become one day.
“Ultimately, I’d like to think their Beanstalk stocks and shares JISA will help them get a car when they’re old enough, or perhaps re-invest it to buy a house later on in life.
“I clearly remember that, when I turned 18, I was given something similar with strict rules that I could only use it on either a house or car.
“I was thankful of it and made sure I didn’t waste it.
“I like to think we can instil the same responsibility in our daughters and give them the best possible entry in adult life that we can,” he concluded.