How saving just £11 a day for a Newborn can turn into £140,348 TAX FREE by their 18th Birthday

How saving just £11 a day for a Newborn can turn into £140,348 TAX FREE by their 18th Birthday

Think about that for a minute. £11.30 isn’t a great deal of money to save every day. If you’re disciplined and keep a lid on your daily costs, it is fairly realistic for most of you to put aside that amount for their child’s future. Imagine how useful £140,348 would be. With rising house prices and general cost of living outpacing the wage growth, in addition to a generally poorer and indebted country, every extra bit of savings will be incredibly useful and somewhat needed for the next generation.

Getting to £140,348 assumes a 7% annual return on your investments, which is the conventional return assumed over the long term, based on historical performance. Of course, your child’s investment pot after 18 years could be more or less than this amount, depending on the investment return. TopDogTrader is a more motivated and active investor that aims for 15-20% annual returns. At a 15% return, your child’s investment pot has the possibility to grow to £313,052! Quite some difference ey!

Bear in mind, a 15% return isn’t an average return, although it is very possible. Arm yourself with knowledge, practice and experience, and like us you could also gain these kinds of returns.*

So, what is a Junior ISA?

A Junior ISA is a long term savings plan with a tax wrapper that allows anyone to pay into it until the child reaches 18 years of age. The money can be put in a Junior Cash ISA or Junior Stocks and Shares ISA.

A Junior Cash ISA will remain in an account gaining interest (typically interest on cash over the past 8 years has been extremely low.)

A Junior Stocks and Shares ISA can be invested in a variety of investments such as stocks, funds, bonds, gold etc. Stocks and Shares investments aren’t guaranteed but to compensate a higher return is looked for.

What’s the maximum you can contribute to it?

The maximum amount changes. In the tax year 2017/18 the maximum is £4128. This amount is likely to slowly increase in the future.  

Who can contribute to it?

Anyone can contribute to it after it has been set up. Grandparents, Uncles, Aunties, etc.

What happens when the child turns 18?

The Junior ISA can be paid to the child, or transferred into an adult ISA.

What if you would prefer to have control of the money instead of the child?

If you are concerned there is a chance that they might spend it irresponsibly after they are 18 years old, you should consider saving it in your own ISA and gifting it to them when required. Currently the maximum you can invest in an adult ISA is £20,000 tax free.

Which is better? Junior Cash ISA or Junior Stocks and Shares ISA?

This depends on your risk appetite and preference. A Junior Cash ISA has the advantage of keeping your capital guaranteed. However, in recent years, the interest on cash accounts has been dismal. A Junior stocks and shares ISA has the advantage of potentially much greater returns. As mentioned, the long term average stockmarket return is 7% per annum, and given the timeframe is a minimum of 18years, historically there is a decent chance of achieving returns that beat the interest rate given on cash. The disadvantage of a stocks and shares ISA is that your investment capital can fluctuate with the market.               

Where can you open a Junior Cash or Stocks and Shares ISA?

Here are some of the best paying Junior Cash ISAs currently available:

Junior Cash ISA Provider

Interest Rate (%)

Coventry Building Society




Tesco Bank



Here is a selection of some Junior Stocks and Shares ISA providers:

Junior Stocks and Shares ISA Provider

Minimum Investment

Annual Charge

Hargreaves Lansdown

£25 per month, or £100 lump sum


Charles Stanley Direct

£50 per month, or £100 lump sum


AJ Bell

£25 per month, or £25 lump sum



£50 per month, or £500 lump sum

£25 pa flat fee

Interactive Investor

£20 per month, or £20 lump sum

£80 pa

What can you invest in your stocks and shares ISA?

Pretty much any investment fund, investment trust, individual company stocks, bonds, Real Estate Investment Trusts (REITS) and many other instruments and assets via Exchange Traded Funds. It’s possible to create a balanced portfolio of funds, etf’s or even individual shares that you can set up and forget about for 18 years.


If you’re looking for some broad good quality managed investment funds, we have summarised our favourites here:

If you are more interested in investments, like we are, you can be a bit more active with the aim of optimising your returns. Our stock selection strategies are performing very well, returning 33.5% within the past 12 months. You can view our recent portfolio update here. If you’re interested in learning how we do it or seeing our narrowed down stock selection lists, we’re offering a one month free trial with no obligations.. check it out… 

1 Month Free Trial. No Credit Card Required. No Obligations.


*Capital is at risk. Stock investments can go down as well as up. Stock investing may not be suitable for everyone - if you have any doubts please consult an independent financial advisor.