Savings for children: Junior ISAs may be 'significantly' better than Premium Bonds – why?


New calculations from the wealth management firm showed if £3,600 was put into a stocks and shares Junior ISA when the product was first made available in 2011, it would currently be worth nearly £10,000 – compared to just £4,000 had the money had been invested in Premium Bonds during the same period.

Premium Bonds remain popular among UK savers, with a record £23.8billion being invested into NS&I savings products over the last year. While Premium Bonds are 100 percent backed by HM Treasury, they now only offer an average of one percent annual prize fund rate, with very low chances of winning any prize amount.

To illustrate how stocks and shares ISAs could be more beneficial over the long term, Quilter examined the investment performance of the IA UK All Company index and the IA Global index, two typical funds representing the British and worldwide market.

Quilter explained: “The maximum JISA subscription limit in 2011 was £3,600 and calculations show that if the full amount was put into a stocks and shares JISA and invested in the IA UK All Company index it would be worth £6,918 today and if invested in the IA Global index worth £9,580 over the 10 years assuming charges of 0.5 percent. The maximum subscription JISA limit now is £9,000.

READ MORE: Benefit claimants could get extra £1,500 from DWP


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