ISA ‘warning light’ as expert calls on Rachel Reeves to make 4 changes | Personal Finance | Finance
A finance expert has issued an ISA warning and urged Rachel Reeves to make four crucial changes. Almost one million children received no contributions into their junior ISAs (JISAs) in 2023–24, according to new analysis by Nottingham Building Society, based on HMRC data. Specialists suggest that this shows that while more families are opening JISAs – “signalling a clear intention to save for their children’s futures” – a growing proportion are unable to deposit regular contributions.
Harriet Guevara, chief savings officer at Nottingham Building Society, said: “Junior ISAs are meant to help families build a financial head start for their children, but these figures suggest a growing number of accounts are effectively sitting empty – and that’s a warning light.
“When around two in five JISAs receive no contributions in a year, it points to the real pressure families are under. The data suggests that many parents are opening accounts for their children with all the right intentions, but that day-to-day costs are crowding out long-term saving.
“Child savings should not be something only a small minority of people can fully use. The priority should be making it easier for families to contribute what they can – little and often – and ensuring the system supports genuine financial resilience, not just high contributions.”
She then listed four things that need to be done by the Chancellor and big names in the sector.
Ms Guevara said: “It is critical that policymakers and the industry come together to focus on practical measures that help more families save for their children. This should include clearer guidance, better use of prompts and support at key moments, like birth registrations, childcare transitions and school milestones, as well as product innovations that make small, regular contributions easier and simpler.
“It may even be worth looking at elements of the previous child trust fund scheme, particularly the Government’s minimum contribution of £250 per child, and whether that may help boost junior savings balances.”
It comes as savers have the biggest choice of accounts in at least 19 years, but the typical rates being offered on accounts are falling, according to a financial information website.
Moneyfacts counted 2,394 savings deals, including cash ISAs, on the market in February, the biggest total in its records going back to February 2007.
