Junior ISA boom: which funds are parents buying?

Savers have been rushing to open investment accounts for their children in 2025 - possibly looking for ways to shelter more of their wealth from tax.

Between the start of January and the end of October this year, the number of Fidelity Junior ISA accounts opened by parents for their children was up 52% on the same period for 2024. And it was 83% higher than 2023.

So, what is driving the surging interest in saving for children and what are the most popular investments for Junior ISAs?

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Why are more parents opening Junior ISAs?

Taxes have been increasing. Following this year’s Autumn Budget, the UK tax take is forecast to reach an all-time high.¹ This means many people will be looking for ways to shelter more of their money from the taxman.

Junior ISAs (JISAs) are a very effective way of doing that. Even if you have used up your own ISA allowance (up to £20,000 per year for stocks and shares), you can still shelter up to £9,000 more into an ISA for your child and any gains will be tax-free.

The limit is per child not per parent, so if you have three children you can put up to £27,000 per year into JISAs.

The booming interest in JISAs may also reflect the enormous wealth transfer currently taking place in the UK, accelerated by the forthcoming change in inheritance tax rules.

According to the Financial Times, around one in five Baby Boomers is a millionaire.² Grandparents cannot open a JISA for their grandchildren, but they can contribute to an existing JISA. This can be a very effective way of passing on wealth while also potentially reducing your inheritance tax liability in the future.

• Read: What is inheritance tax? The basics

If you invested the maximum (£9,000) each year into a JISA for 18 years and your investments grew by 5% per year after fees, you’d have amassed a pot worth more than £250,000 for your child - a life-changing sum. Even smaller contributions can give young adults a huge leg up.

What are the most popular Junior ISA investments?

The most bought fund among JISA investors in October 2025 was the Fidelity Index World Fund.

Opting for simple, low-cost funds such as this, which passively track the entire stock market, is often a sensible strategy when investing over a long period. It is usually cheaper than investing in an ‘active’ fund, where a professional manager picks companies they believe will outperform the market. And research has shown that keeping costs down is one of the most powerful ways of boosting your returns.

It is perhaps no coincidence that the top five most popular JISA funds in October were ‘passive’, otherwise known as index funds.

Four out of five were global passive funds, which track the performance of stock markets all over the world, while one (the UBS S&P 500 Index Fund) was specifically focused on tracking the performance of a basket of stocks in the US.

In recent years, backing just the US market would have paid off for many investors, as American stocks, led by big technology companies, regularly outperformed other markets.

Some JISA investors were even more focused on this historically high performing segment of the stock market. The sixth most popular fund was the Legal & General Global Technology Index Trust, which tracks the performance of big technology companies like NVIDIA, Apple, Microsoft and Meta.

However, past successes are no guide to the future. There are question marks over whether America’s outperformance can continue and whether the high prices of US tech stocks are sustainable. Therefore, parents investing for their children may prefer a broad, global approach rather than putting all their eggs in one basket.

Most popular Junior ISA funds in October 2025

1. Fidelity Index World Fund 
2. UBS S&P 500 Index Fund
3. Vanguard FTSE Global All Cap Index Fund
4. HSBC FTSE All World Index Fund
5. Vanguard LifeStategy 100% Equity Fund
6. Legal & General Global Technology Index Trust
7. Fidelity Multi Asset Allocator Adventurous Fund
8. Fidelity Index US Fund
9. Fidelity Cash Fund
10. Royal London Short Term Money Market Fund

Source: Fidelity International, gross Junior ISA fund sales in October 2025

Stocks aren’t the only option when investing for children.

The seventh most popular fund among JISA investors was the Fidelity Multi Asset Allocator Adventurous Fund. This invests in various kinds of investments (or “assets”): around 80% of the portfolio is invested in stocks and around 20% in bonds. The latter are considered lower risk and could provide some protection in the event of a stock market crash - although they may deliver lower returns.

The ninth and tenth most popular JISA funds were the Fidelity Cash Fund and the Royal London Short Term Money Market Fund. These are both money market funds, which invest in short-term bonds and are supposed to deliver ‘cash-like’ returns.

These kinds of funds are generally much lower risk than investing in stocks and shares, however they do typically deliver lower returns over the long-term. They are not completely without risk and can fall in value.

If you are investing for a child and have 10 years or more before they will be accessing the money, it is often better to invest in a well-diversified portfolio of stocks rather than opting for cash or cash-like investments. That’s because cash returns can struggle to keep pace with inflation over long time horizons.

So, if you want to give your child or grandchild the best start in life, make sure their JISA investments are working as hard for them as possible.

• Open a Fidelity Junior ISA
• Open a Fidelity Junior SIPP

Got a burning question you want to ask? Why not drop us a line. Click here to ask your question.

• Read: How to talk to your children about their inheritance
• Read: Should you pay for your child’s university fees from your ISA?
• Read: How to save for university costs - in just 10 years

Source:

¹ Financial Times, 26 November 2025
² Financial Times, 9 January 2019

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Eligibility to invest in a Junior ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. Withdrawals from a Junior ISA will not be possible until the child reaches age 18. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. An investment in a money market fund is different from an investment in deposits, as the principal invested in an money market fund is capable of fluctuation. Fidelity’s money market funds do not rely on external support for guaranteeing the liquidity of the money market funds or stabilising the NAV per unit or share. An investment in a money market fund is not guaranteed. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.