How long-term investing could boost parents’ savings by almost 50% by the time their child turns 18 

As children grow up, so do the costs that come with each new stage of life. From learning to drive and travelling, to university, housing and later milestones like weddings, many parents find themselves thinking ahead about how best to support their children as they become adults.

New analysis from Fidelity International (‘Fidelity’) shows how parents who start early could use long-term investing through a Junior ISA (JISA) to build a pot for their child’s future and help contribute towards key life milestones over time. A JISA allows parents, grandparents, and family friends to invest on behalf of a child, with any growth free from UK income and capital gains tax. The money is set aside for the long term and becomes available to the child when they turn 18.

What today’s milestones actually cost

University remains one of the biggest expenses families think about. While tuition fees in England are typically covered by student loans, the cost is much higher once rent and living expenses are included. The cost of a three-year degree for a student living away from home outside of London can exceed £65,000, leading many families to focus on contributing towards living costs or reducing the amount their child needs to borrow¹.

Housing is another major pressure point. Using the average UK house price, a 5% deposit is around £13,500, while a 10% deposit is closer to £27,000². While few parents expect to fund a full deposit alone, some aim to provide a starting contribution to help their child get onto the housing ladder.

Other early-adult milestones also carry significant costs. Getting ‘on the road’, including driving lessons, tests and a first car, can cost around £6,250³. A gap year or extended travel can easily require a £10,000 buffer. Later in life, families often help with weddings or other major life events, where costs can exceed £20,000⁵.

Rather than trying to cover these costs as they arise, some parents are choosing to plan years in advance by investing small amounts regularly in a Junior ISA.

What saving little and often could add up to by the time your child turns 18

The table above is for illustrative purposes only. The table is not intended to be presented as a whole. It shows simplified examples of returns when investing over different periods into a JISA. The examples use fixed assumptions whereas actual returns from investments will be variable and depend on many factors and values can fall as well as rise meaning investors could get back less than they put in. The assumptions used are a 5% growth rate per annum, less a 0.75% annual management charge. Fidelity does not charge a service fee for Junior products. The assumptions do not take inflation into account which would reduce the buying power of the figures shown.

Jemma Slingo, Pensions and Investment Specialist, Fidelity International comments: “It’s important to stress that parents don’t need to save for everything or cover the full cost of these milestones. For many families, the aim is simply to take some pressure off at key moments -whether that’s helping with first-year university costs, contributing towards a house deposit, or giving their child a financial cushion as they start adult life.

“Saving in a Junior ISA doesn’t have to be tied to a specific objective either. Many parents simply want to give their child a head start, knowing the money will be there when it’s needed, even if they don’t yet know exactly how it will be used.

“What matters most is starting early, setting a contribution that feels manageable, and sticking with it. Even relatively small monthly amounts can add up over time, and a well-diversified approach can help smooth the ups and downs of investing. Junior ISAs are designed for this kind of long-term planning, giving families the chance to build a pot that grows over time and offers children more choice when they reach 18.”

Jemma Slingo suggests four investment ideas for a Junior ISA

1. Rathbone Global Opportunities: This fund invests in a focused selection of high-quality companies from developed markets around the world that the managers believe have strong long-term growth potential. It concentrates on businesses creating new products, services or more efficient ways of operating. For a JISA, it provides exposure to global growth while helping young investors understand that investing means owning shares in real businesses.
2. Fidelity Special Situations: This fund focuses primarily on UK-listed companies, ranging from well-known household names to smaller firms that play an important role in the domestic economy. Including a UK-focused fund can help diversify a portfolio and give children a clearer connection to the economy closer to home.
3. Lazard Emerging Markets: Investing in emerging markets offers exposure to regions with younger populations and expanding middle classes. This fund provides a way to access growth opportunities outside developed markets and highlights that different parts of the world grow at different speeds and are driven by different economic forces, which can be valuable over long investment horizons.
4. Gold: Gold has historically behaved differently from equities and can help balance portfolios in uncertain times. Exposure can be gained either through physical gold holdings or through companies that mine it, for example via funds such as iShares Physical Gold or the Ninety One Global Gold Fund.