Martin Lewis urges parents to favour investment over Junior Cash ISAs
Financial adviser Martin Lewis cautions that Junior Cash ISAs lock money for 18 years and are likely to underperform compared with diversified investment funds.
Martin Lewis, the well-known personal-finance commentator, warned that Junior Cash ISAs may not be the optimal vehicle for saving for a child’s future. Although the accounts permit contributions of up to £9,000 per tax year and are tax-free, the money remains inaccessible until the beneficiary reaches 18, effectively locking it away for nearly two decades. Lewis contends that, given this horizon, the cash held in such ISAs will likely be "massively" outperformed by a diversified investment approach, such as a global index fund tracking around 1,400 large companies.
He advises parents and grandparents to consider investing the contributions instead, provided they have an emergency cash reserve elsewhere. Lewis also shared anecdotes of people who have benefited from long-term equity exposure, emphasizing the importance of spreading risk across many shares rather than concentrating on single stocks.
