The innocence of youth.

Children can make us laugh and cry when they’re talking about a topic they know little about, often making adorable comments. The subject of money in particular is a prime example.

Of course we can’t expect young children to fully understand the value of money and financial products like stocks and shares ISAs. But as we found out from a survey we ran in 2012, it’s still amusing.

Children say the funniest things

198 children aged six took part in the survey, with a majority already receiving pocket money from their parents. The amounts they receive varied but when asked to share the ideal pocket money allowance, 25% said they would be happy with just £1 per week.

Other amusing findings from the survey included:

• Today’s six year-olds are an ambitious lot: - a whopping 81% believe they’ll own their first-ever house by the time they’re 25 years old. But, some of them think a house costs £100.
• There’s no need to pay them big bucks - one in three thinks they’ll earn up to £100 a year when they’re older. That equates to a tidy sum of £1.98 per week. Whilst 25% believe a salary of £10 will be enough to be happy.
• The bank of Mum and Dad will still play an important role - 53% expect Mum and Dad to help them buy their first car, which 49% want for their 18th birthday.  Over a third expect their parents to cover their university fees.

Help is on hand

Saving clearly isn’t top of a six year old's mind. However, parents can help their children save for the future. In 2011 the Government introduced Junior ISAs, giving parents the opportunity to invest tax-efficiently for their children. 

The money invested in a stocks and shares Junior ISA is locked away until your child becomes 18 and then rolls up into an adult ISA. You should consider it to be a medium to long-term investment, ideally of five years or more. Please remember the value of the investment may fall as well as rise and is not guaranteed. This means it may be worth less than the amount invested.

The tax assumptions we’ve used are those currently relevant, but tax laws can change over time which could affect investments. The value of the tax benefit will depend on individual circumstances.