For many parents and grandparents, a Junior ISA feels like a brilliant idea in theory, but slightly nerve-wracking in practice.
The tax advantages are clear. The long-term growth potential is powerful. The ability for family members to contribute is helpful.
But then comes the big question:
What happens when they turn 18?
Will the money be carefully used for university, a house deposit or future plans?
Or will it disappear on a car, a holiday or one very expensive summer?
It’s a common concern, and for some families, it’s enough to stop them investing at all.
The good news
Recent data from AJ Bell suggests those fears may be overstated.
Looking at Junior ISA accounts maturing between 2023 and 2025, the majority of young adults did not cash out their savings in full.
In fact:
- 33.1% continued saving, contributing to their new adult ISA after the Junior ISA matured.
- Fewer than 1 in 10 (8.9%) withdrew more than half of their savings within the first year.
- Just 6.5% emptied the account entirely in the first year.
Full cashing-out was the least common outcome.
In other words, most 18-year-olds aren’t plundering the pot.
Around 19% made some withdrawal, but that doesn’t necessarily mean recklessness. Many are likely taking a blended approach: using a portion for travel, education or early adult costs, while keeping the rest invested.
That’s arguably a healthy financial decision.
Why this matters
Junior ISAs allow up to £9,000 per year to be contributed by parents, grandparents, family and friends. At age 18, the account automatically converts into an adult ISA and the young person gains control.
The idea of handing over a five-figure sum can feel daunting. But the data suggests most young adults treat it more responsibly than many parents expect.
It also highlights something important:
Financial habits often follow financial education.
Children who grow up knowing they have savings, and understanding why they exist, are often better prepared to make sensible decisions when the time comes.
The power of starting early
Even modest contributions can grow meaningfully over time.
For example:
- Saving £500 per year from birth could build a pot of nearly £15,000 by age 18, assuming a 5% annual return after charges.
- A one-off £1,000 invested at birth could grow to more than £2,400 over the same period on the same assumptions.
The key is time. Starting early means growth has longer to compound.
And it doesn’t have to be a solo effort. Grandparents and wider family can contribute too, often turning it into a collective project rather than a parental burden.
A shift in perspective
The fear that “they’ll just spend it” is understandable. But increasingly, young adults are more financially aware than they’re given credit for.
Of course, no one can guarantee how any individual will use their money at 18. But the evidence suggests that most are making balanced decisions rather than impulsive ones.
For many families, the bigger risk may be not starting at all.
Source: AJ Bell, How many teens keep their Junior ISA at 18?
The value of investments can fall as well as rise and you can get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Approver Quilter Financial Services Limited 27/02/2026
