Families across Britain are increasingly using Junior ISAs to pass money on while reducing the amount of tax they may have to pay.
New figures obtained from HMRC through a Freedom of Information request show that 78,330 children had the full £9,000 annual allowance paid into their Junior ISA accounts during the 2023–24 tax year.
This figure represents the highest level of maximum contributions recorded since before the coronavirus pandemic struck, when 80,060 accounts were fully subscribed in 2019-20.
The latest statistics mark a nine per cent jump compared with the 71,910 accounts that received the maximum contribution in 2022-23.
Over a longer timeframe, the trend is even more pronounced, with fully funded JISAs climbing 41 per cent since 2020-21, when just 55,570 accounts reached the ceiling.
Adrian Murphy, chief executive of Murphy Wealth, the firm that secured the HMRC data, said: “A lot of families are exploring different ways of passing down wealth to their loved ones earlier in life.
“JISAs are a great way of doing that, providing tax-free growth and income that can compound over a significant period of time.”
The momentum has continued into 2025, with Hargreaves Lansdown, Britain’s largest stockbroker, recording a 32 per cent increase in clients depositing the maximum amount into JISAs between April and October compared with the same months in 2024.
Inheritance tax changes will likely impact the pension planning of Britons going forward, a new survey has found | GETTY
Sarah Coles of Hargreaves Lansdown said: “The fact that there was so much speculation about potential tax changes in the autumn Budget will have convinced some people to revisit all the tax wrappers at their disposal, and do more tax planning as a family.”
The surge in JISA contributions reflects growing anxiety about forthcoming changes to the inheritance tax regime. From April 2027, pension wealth will be included within taxable estates, a policy shift that the House of Lords criticised last week.
Ms Coles noted: “Pensions will drag more than 10,000 people into the inheritance tax net in the 2027-28 tax year alone, and for some people this change will have encouraged them to prioritise giving money away.”
The standard Inheritance Tax rate is 40% | GETTY
The 40 per cent death duty has already ensnared an expanding number of households as property values have climbed while tax thresholds remain static.
Estates exceeding £325,000 face the charge, rising to £500,000 when a family home is passed on, or £1 million for married couples. These allowances are frozen until at least 2031.
Junior ISAs permit parents and guardians to shelter up to £9,000 annually in either cash or equities, with all growth exempt from capital gains and income tax.
Families across Britain are increasingly turning to Junior ISAs to minimising tax exposure
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GETTYThe child gains access to the funds upon reaching 18, providing what Mr Murphy described as “a level of assurance that the money will be used for some of the big life events that take place around that age – whether it’s buying a first car, help with university costs, or taking that first step into a career or onto the property ladder.”
For those seeking to reduce their estate’s value, the annual gift allowance of £3,000 per person falls outside inheritance tax calculations immediately. Any unused portion can be carried forward for one year only.
Gifts exceeding this threshold require the donor to survive seven years before the transfer escapes the estate entirely.
