Cash junior ISAs have risen to 38.3% of all JISA accounts, up from 36.4% the previous year, as parents put more money away into accounts with lower overall upside, the latest HMRC figures show.
Some £2.5bn was put into junior ISAs in the 2024/25 tax year, up from £1.8bn the previous year, with around 61.7% going into stocks and shares options. The average amount added to a junior ISA in the 2024/25 tax year was £1,570, a 17% increase compared to the year before.
Charlene Young, head of technical at AJ Bell, said it was “another incredibly strong year for the junior ISA”.
However, while stocks and shares options account for the majority of subscriptions by value, the increase in cash ISAs is part of a wider pattern among parents, according to analysts at Fidelity.
Jemma Slingo, pensions and investment specialist at Fidelity International, said the figures “reinforce something we can see clearly in our own research: there is a real ‘cash comfort gap’ when parents put money aside for their children”.
“Among parents already saving or investing for their children, 43% use a cash junior ISA compared with just 20% using a stocks & shares junior ISA,” she said.
This is despite more parents acknowledging that investing can deliver better long-term returns than cash.
Young noted that while the HMRC figures were positive, with almost 40% still going into cash options, “there’s clearly room for more parents to consider investing for their children”.
Fidelity’s figures show parents who regularly save or invest for their children put aside £113 a month on average. Over 18 years, this amounts to £24,400.
Assuming annual investment growth of 4.25% (5% minus fees of 0.75%), Fidelity estimated that investing those contributions could have built a pot of approximately £36,700. Using the ICE BofA British Pound 3-Month Deposit Offered Rate Constant Maturity Total Return Index, the firm estimated that a cash account would equate to £29,300 over the same period.
Slingo said: “Cash can make sense for money that is needed soon, but for money genuinely being put aside for a child’s adulthood, taking some investment risk can give it a better chance to grow.
“It is easy to overlook the drawbacks of holding money in cash over long periods of time. A cash balance may not fall, but inflation can quietly erode its value, meaning your child will be able to buy less with the money when the time comes.
“By taking on more risk – for example, by investing in the stock market – the money has a better chance of growing.”
Child trust funds
Another option for parents is child trust funds, which AJ Bell's Young said have been “a massive missed opportunity” for savers. The government put money into these accounts, but many remain untouched.
HMRC figures show 826,000 accounts have matured but remain unclaimed, with the total value growing by another £409m since last year to £1.91bn in April 2026.
Over half of the money in these accounts (£1.25bn) matured over a year ago, while around 34,000 unclaimed accounts have a balance of £10,000 or more, with 380,000 pots containing over £1,000. The average child trust fund account is worth £2,312.
“If you were born, or if you have a child who was born, between 1 September 2002 and 2 January 2011, there could be a child trust fund waiting to be found. You can track it down through the tool on the government website,” she concluded.