Saving for children is becoming more important, according to latest figures from HMRC, which show the number of Junior Isa accounts being opened has soared.
Some 295,000 Jisas were opened in the 2012/13 tax year, with a total of £392 million invested.
This compares to the 71,000 Jisa accounts that were opened in the first six months of their inception, between 1 November 2011 and April 2012.
However the average amount being invested has fallen slightly. The average investment in the first six months was £1,623 per account; in the most recent tax year the average account was worth £1,327.
But these figures are less than half of the maximum that can be invested in the accounts, the limit of which is £3,600 per year – showing that parents and grandparents are still not taking full advantage of this tax-free method of saving.
And while take-up may be increasing, still only around 5 per cent of eligible children currently have accounts.
This is very low compared to Child Trust Funds, 20 per cent of which received additional contributions after the initial voucher. But Danny Cox, head of financial planning at Hargreaves Lansdown, says paying additional money in to an account was easier than starting from scratch. 'CTFs have been around since 2005 so have had time for momentum, Junior Isas were launched during a financial crisis,' he adds.
HMRC has said the take up is 'in line with expectations'. Cox thinks the young savers accounts are gaining momentum, which 'will be improved once transfers are allowed from Child Trust Funds'. That consultation closes on 8 August, with transfers expected to be allowed from the autumn.
Subscribe to Money Observer Magazine
Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.Subscribe now