Thousands of youngsters are amassing a fortune before they even come of age, with the prospect of becoming a millionaire “more achievable than you think” as helping your child reach financial greatness is within grasp. By fully funding a Junior ISA with £9,000 annually from birth, parents or grandparents could bestow their offspring with over £255,000 by their 18th birthday, according to recent figures.
Hargreaves Lansdown has crunched the numbers and foresees that with an ongoing annual ISA contribution of £5,000, the lucky recipient could hit the £1million mark by 43. Similarly, a full £3,600 contribution yearly into a Junior SIPP could lead to a hearty pension pot of nearly £98,000 by the time they turn 18.
Rob Burgeman, a savvy investment manager at RBC Brewin Dolphin, remarked: “A more modest pot of £50,000-£100,000 will certainly be within the reach of many. Starting at birth, a £50,000 pot could be built by the child’s 18th birthday on contributions of roughly £150-a-month, assuming annualised returns of five per cent after charges.”
The savings summit doesn’t end there. “Increase the contribution to £300-a-month, and the junior Isa will be looking at a windfall of around £100,000.”
Helen Morrissey from Hargreaves Lansdown, the font of retirement analysis expertise, opined: “Becoming a millionaire may feel like an impossible dream for most of us, but if you can start people off early on their investment journey, it’s more achievable than you might think.”, reports Birmingham Live.
“Junior ISAs and SIPPs are a great way to help build the financial resilience of a child or grandchild, with the combination of regular contributions and long-term investment growth building a firm foundation upon which they can build as they get older.”
“Starting your loved one’s savings journey early gives them an enormous advantage over the long-term. The increased time in the market can really pay off. It can also act as an important early lesson in the power of investment in making the most of their money.”
“Watching their money grow over time can boost their confidence and spark a lifelong interest in investing.”
