Kevin Brown

According to findings from Scottish Friendly’s Family Finance Tracker, as rules currently stand, JISA rules prohibit anyone other than a parent or legal guardian from setting up JISAs. That means the wider family has to wait until the parent or legal guardian has set one up first, before they can start contributing.

Scottish Friendly believes that not letting the wider family act on the clear desire to get their grandchild, nephew or niece off to a better financial start in adult life is squandering a vital opportunity to help build early-stage financial resilience. The modern mutual believes that by rewriting the single line in the rules that prohibits wider family from being proactive it would mean many more children could benefit.

Kevin Brown, savings specialist at Scottish Friendly, explains: “Family life is turned on its head with the arrival of a new baby. As parents and guardians contend with the immediate and pressing priorities of caring for very young children, things like setting up a Junior ISA can get put on the ‘deal with later’ list.

“That is completely understandable, but it is also precisely why it’s so important to remove the barriers to the wider family being able to step in to help when the parents have their hands at their fullest.”

Scottish Friendly says JISAs can provide children with a financial buffer as they enter adulthood – something upon which they could then use to grow long-term financial resilience to help weather whatever life throws at them.

The modern mutual argues that 18 years of even small regular contributions to a JISA could provide solid foundations for the child, starting on a firm financial footing as they take on the challenges of life as an adult.

Mr Brown continued: “Losing out on early years of JISA growth is an opportunity missed – it reduces the ultimate size of the financial buffer available to the child. That one line in the rules has unintended consequences that could negatively impact children, who they are set up to help.

“When there is so much that is complex and intractable in financial services, the simplicity of changing that one line to better reflect the realities of modern families is surely a no brainer? Especially when there is such clear demand for it.”