Maggie Williams and Anthony Luzio ask a group of teenagers what they would do if they were given a lump sum on their 18th birthday
Wasted on the young ?
If the last year has taught us anything , it is the importance of having a savings safety net for unexpected circumstances . Buffeted by furlough , redundancy and the effects of lockdown , young adults have been the age group hit hardest in financial terms by the pandemic , but are the least likely to have a cushion of savings to fall back on . Parents can help their children to build a secure financial future through a Junior ISA ( JISA ), or by topping up their Child Trust Fund ( CTF ) if they were eligible for one . JISAs enable parents or guardians to save up to £ 9,000 a year for their child , in a cash or stocks & shares account , or a combination of the two . When the child reaches 18 , the money is transferred into an adult ISA and they take full ownership of it . From that point , the standard tax-free ISA allowance of £ 20,000 a year applies . Older children may have money in a Child Trust Fund ( CTF ), which were made available to anyone born between 1 September 2002 and 2 January 2011 , with the government kickstarting their saving with a £ 250 voucher . If the parents did not open one , HMRC set up the account with a starter payment on their behalf . Although it ’ s not possible to open a new CTF , parents and guardians can continue to pay into an existing account until their child reaches 18 . In the same way as a JISA , the money can be invested into an adult ISA from the age of 18 ( or taken in cash ). CTFs can also be converted into JISAs . Regardless of the vehicle , the usual benefits of regular contributions and compound interest apply : “ It is technically possible that by the time a child reaches 18 , they could have a quarter of a million pounds [ in a JISA ],” says Zoe Dagless , financial planner at Vanguard .