94% of parents worried about their child's financial future
94% of parents are worried about their children's financial future according to a study by J.P. Morgan Asset Management. Despite this, the research has revealed that only a third of parents (35%) would consider opening a Junior ISA for their child as a way to start saving for their future.
Parents' top concerns
The study, conducted by J.P. Morgan Asset Management to mark the launch of its Junior ISA, which offers access to investment funds from over 30 UK asset managers from £50 per month, revealed parents' biggest concern for their child's future is that they are able to enjoy life without struggling financially. Over half (57%) of respondents cited this as a worry. Their second and third largest concerns are unemployment and the rising cost of living, 56% and 53% respectively. Nearly a fifth of parents (22%) worry the level of savings their children will have accumulated when they reach adulthood will not be enough, particularly among those with children under five, 25%, in comparison to 17% of parents with children between 11 - 15 years old.
Keith Evins, Head of UK Marketing at J.P. Morgan Asset Management commented: "With recent figures showing youth unemployment in the UK currently standing at 22%, it is unsurprising such a high proportion of parents are concerned about their children's future, particularly from a financial perspective. However, it is alarming that in spite of this only 35% of parents are considering opening a Junior ISA. It is important parents understand there are few tax efficient ways of saving and investing for the long term and a Junior ISA is one of the simplest."
"Previous research we conducted shows that the likely average contribution into a Junior ISA would be £1,117 a year (£93 per month), which could mean a savings pot worth over £34,000 by the time the child turns 18."
Sacrificing ISA savings
The study also highlighted that among those parents who would consider opening a Junior ISA over a third of parents (34%) would sacrifice their own ISA contributions in order to do so. One in 10 would use up to 50% of their current ISA contributions and a further 16% would use 25% or less of their current ISA contributions to pay towards a Junior ISA. One in 20 would even go to the lengths of ceasing investment into their own ISA in order to pay into a Junior ISA.
Keith Evins continued: "The fact that parents are willing to sacrifice some of their own ISA contributions to help fund their child's future shows their commitment to investing for the future of their children. However, with minimum contributions from £50 per month, such sacrifices could be achieved. In addition, previous research by J.P. Morgan Asset Management showed nearly half of adults in Britain (43%) would contribute to a Junior ISA for the child of a family member or friend. Such additional contributions could help enhance the savings parents are able to make."
Evins concluded, "We believe investing in a Junior ISA via a secure online investment platform, such as J.P. Morgan's WealthManager+, offers savers an optimum investment solution of investing through more than one fund manager in one place. As savers are limited to holding just one stocks and shares and one cash Junior ISA at a time, it is important to choose a Junior ISA provider that offers choice and flexibility when choosing which long term investments are appropriate. J.P. Morgan Asset Management's online service offers access to a range of different investments from over 30 UK asset managers and includes funds, investment trusts, equities, ETFs, gilts and bonds."
The J.P. Morgan Junior ISA
J.P. Morgan Asset Management is launching its Junior ISA on 17 February 2012 which can be opened online, by post or over the phone. With the J.P. Morgan Junior ISA investors can invest with 30 different UK fund providers online through J.P. Morgan WealthManager+ which also offers investment through ISAs, SIPPs and investment accounts. With the J.P. Morgan Junior ISA, you can start investing from £50 a month or with a £100 lump sum with no initial or annual management charge apart from a £10 transaction charge on equity trades.
For further information, go to: jpmorganassetmanagement.co.uk/investor/ourinvestmentrange/junior-isa.aspx
J.P. Morgan WealthManager+
J.P. Morgan WealthManager+ is our secure online service, which allows you to access a child's Junior ISA account and make investment transactions easily, quickly and when it suits you.
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Not only does J.P. Morgan WealthManager+ let you invest in our extensive range of investment trusts and funds, but you can also access funds from 30 leading UK fund providers with a wealth of experience and knowledge.