£3,129 a year needed to ‘give a child a foot on the property ladder at 18’
A child born now would need average annual contributions of £3,129 into their Junior Isa, Quilter calculated.
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Your support makes all the difference.Parents and grandparents face putting away more than £3,000 per year typically to help children on to the property ladder in adulthood, according to calculations.
A child born now would need average annual contributions of £3,129 into their Junior Isa (Jisa) to afford the average UK first-time buyer deposit once they reach the age of 18, according to financial adviser, Quilter.
In London, they would need £7,120 annually.
The research assumed that the average first-time buyer deposit, at £57,278 in 2020, increases by 2% each year.
It also assumed a 4% return on savings.
Many parents and grandparents will underestimate just how much is required to support their child or grandchild become a homeowner
Heather Owen, financial planning expert at Quilter, said: “The average amount put into Jisas was just over £1,000 in 2019/20, but a child born today will need contributions worth over three times that amount, or £3,129 each and every year for 18 years in order to generate a pot big enough to afford a deposit when they reach adulthood.
“Parents and grandparents will be assisted by the fact that Jisas have become significantly more generous, and the subscription limit stands at £9,000, but many parents and grandparents will underestimate just how much is required to support their child or grandchild become a homeowner.”
Quilter analysed Halifax first-time buyer data to make the findings.
Here is the average estimated first-time buyer deposit in 2039 and the average annual contribution into a Jisa that Quilter estimates that parents and grandparents would need to make to get a child onto the property ladder:
– Scotland, £52,074, £1,952
– Wales, £47,584, £1,784
– Northern Ireland, £43,009, £1,613
– Yorkshire and the Humber, £48,531, £1,820
– North West £50,037, £1,876
– East Midlands £56,891, £2,133
– West Midlands £61,276, £2,297
– East Anglia, £74,481, £2,793
– South West £74,876, £2,807
– South East £94,562, £3,545
– London, £189,906, £7,120