Kevin Brown

Data from Scottish Friendly’s latest Investor Index shows that the number of junior stocks and shares ISA policies opened by Scottish households in the three months to September was 27% higher than the UK average.

However, despite higher sales, the value of these newly opened JISA policies was down 4% on the UK average, which suggests that despite a growing commitment to save for their children’s future, families in Scotland have less money to invest.

Households across the UK are feeling the pinch with investment in new Junior ISA policies falling 38% between Q3 2021 and the same quarter this year.

Inflation is the most likely cause, as it has risen from just 2% at the start of Q3 2021 to 10.1% in July 2022, eroding a significant portion of what households can afford to save.

Recent forecasts from Scottish Friendly and the Centre for Economics and Business Research (CEBR) estimate that families saved an average of just £17 a week in Q3 of this year, a drop of 74% compared with Q3 2021.

The research also found that real savings returns reached their lowest level since 1976 last quarter as they fell to -9% in July 2022.

This has coincided with the growth in the popularity of junior stocks and shares ISAs, but in sharp contrast to this, adult investment levels have dropped.

Between Q3 2021 and Q3 2022 Scottish Friendly’s new policy sales for its adult investment ISAs among Scottish customers were down 20%, while investment values fell to their lowest level since Q3 2020.

Kevin Brown, savings specialist at Scottish Friendly, comments: “Households in Scotland are walking a tight rope - balancing the rising cost of living with securing their children’s finances.

“The sum of money that households have available to save or invest has shrunk significantly over the past 12 months, as their outgoings have shot up.

“But what is encouraging is the growth we have seen in the number of Junior ISA investments, which exceeds the rest of the UK and shows no signs of slowing.

“Investing little and often – small amounts of money on a regular basis – may be more achievable for a lot of families at this moment in time.

“One of the common myths about investing is that it is only for the wealthy and well-advised, but it doesn’t need to be large sums, by drip feeding as little as £10 a month, investors can find that the pounds can soon start to add up.

“We want to support as many families as possible to achieve financial security and prosperity, and these latest figures are a positive sign that although times might be hard, people are on the right track.”