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“ They grow up so fast !“
Research from Fidelity International suggests that parents who are able to invest the full JISA allowance ( which stands at £ 9,000 ) each year over an 18- year period could provide their kids with an impressive £ 247,517 pot , assuming annual growth of 5 per cent . This would give Leah significant financial backing for her adult life . However , it may prove to be a push . The same research found that monthly contributions of £ 150 over 18 years ( equating to £ 1,800 per year ) could still generate a pot worth £ 48,542 .
POTENTIAL JISA RETURNS
Monthly investments for 18 years
Potential final value
“ If you are willing to accept the ups and downs along the way , I would suggest having 100 per cent in equities . Within that you could have an allocation to smaller companies and emerging markets as well ” £ 60 £ 19,416 £ 80 £ 25,889 £ 100 £ 32,361 will erode the value of the savings over time . It ’ s time to get cracking . Given I have around 16 years until Leah will be able to get her hands on the money , where should I begin ? The first step is to articulate the investment objective . Put simply , I want to comfortably increase the value of her savings ahead of inflation and generate healthy returns over time . This , in turn , determines the split between shares , bonds and so-called alternatives , such as infrastructure . Fortunately , with such a long time horizon in mind ( at least 16 years , but hopefully longer if Leah remains invested ), this decision appears to be pretty straightforward – or so the investment specialists tell me . “ As you have a long-term time horizon , I would expand your risk budget as much as possible ,” says
£ 150 £ 48,542 £ 750 £ 247,517
Source : Fidelity International , March 2021 , assumes annual growth of 5 %, no inflation , includes 0.75 % annual management charge
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