Cash-strapped parents unable to pay into children’s Junior ISA accounts
New figures from HM Revenue and Customs (HMRC) reveal nearly a million Junior ISA accounts were denied new funding in the 2023-24 financial year, highlighting the ongoing impact of the cost of living crisis on families.
Analysis of HMRC data carried out by Nottingham Building Society following a freedom of information request has revealed that around 967,000 Junior ISAs (JISAs) saw no contributions during the year.
This marks an increase from 869,000 accounts in 2022-23, the previous year.
The housebuilder said around two in five Junior ISAs had no money added for the entire year.
While the total number of Junior ISAs has increased from 2,167,000 to 2,367,000 in 2023-24, this growth has been outpaced by the proportion of accounts receiving no contributions. All figures are rounded to the nearest 1000.
According to the Nottingham Building Society, the trend shows a “widening gap between intention and action” indicating families are likely struggling with financial pressures.
Between 2020-21 and 2023-24, the total number of Jisas increased by 37%, while the number of accounts not receiving contributions in a given tax year increased by 45%.
Around 78,000 Jisas took out the full £9,000 subscription in 2023-24; this represents approximately 3% of the total number of Jisa accounts.
Almost three quarters (73 per cent) of Jisas deposited less than £500 in 2023-24 and 92 per cent received deposits of less than £2,500.
Nottingham Building Society’s chief savings officer, Harriet Guevara, said: “The aim of Junior Isas is to help families get a financial head start for their children, but these figures show that an increasing number of accounts are effectively sitting empty and that is a warning light.
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“When nearly two in five Jisas receive no contribution in a year, it’s a sign that families are under real pressure. The data shows that many parents open accounts for their children with the right intentions, but the day-to-day costs are dwarfing the long-term savings.”
“Child savings should not be something only a small minority can fully use. The priority should be to make it easier for families to contribute as much as they can – little and often – and to ensure the system supports real financial resilience, not just large contributions.”
