Helping your child become a millionaire is 'more achievable than you think' as thousands amass £100k before turning 18

Contributing the full £9,000 per year to a Junior ISA from birth could give someone's child or grandchild a nest egg of more than £255,000 by the time they reach 18, new data shows.

Hargreaves Lansdown estimates that if they continue to contribute £5,000 per year to their ISA then they would reach £1million by the time they are 43.

If they were to contribute the full £3,600 per year to a Junior SIPP they could have a pension worth almost £98,000 by the age of 18.

Further, if they were to continue to contribute £200 per month (£2,400 per year) to their SIPP they would have a pension worth one million by the age of 61.

By the time they hit state pension age at 68, this would have swelled to almost £1.4million.

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown: "Becoming a millionaire may feel like an impossible dream for most of us, but if you can start people off early on their investment journey, it’s more achievable than you might think.

"Junior ISAs and SIPPs are a great way to help build the financial resilience of a child or grandchild, with the combination of regular contributions and long-term investment growth building a firm foundation upon which they can build as they get older.

"Starting your loved one’s savings journey early gives them an enormous advantage over the long-term.

"The increased time in the market can really pay off. It can also act as an important early lesson in the power of investment in making the most of their money.

"Watching their money grow over time can boost their confidence and spark a lifelong interest in investing."

Britons can contribute up to £9,000 per year with any withdrawals made free of income tax.

A "great benefit" of these products is that even though the money within the JISA belongs to the child, they cannot make any withdrawals from it until they hit 18.

According to HMRC figures for the 2021-22 tax year, 370 children have over £200,000, which shows a sharp rise from just 40 in the previous year.

The top 50 child investors are sitting on junior ISAs averaging a massive £761,000 – putting them firmly on track to join millionaires’ row in their 20s.

In terms of junior ISAs that are worth more than £100,000, there are 1,910 kids with pots of that size. This is more than triple the number recorded a year previously when there were just 540 young investors with an account running into six figures.

The number of children with JISA pots worth more than £50,000 has doubled from 8,130 to 16,420 last year

Rob Burgeman, investment manager at RBC Brewin Dolphin said: "A more modest pot of £50,000-£100,000 will certainly be within the reach of many.

"Starting at birth, a £50,000 pot could be built by the child's 18th birthday on contributions of roughly £150-a-month, assuming annualised returns of five per cent after charges.

"Increase the contribution to £300-a-month, and the junior Isa will be looking at a windfall of around £100,000."