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£3,129 a year needed to ‘give a child a foot on the property ladder at 18’

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Parents and grandparents face putting away more than £3,000 per year typically to help children onto the property ladder in adulthood, according to Quilter (Ian West/PA) (PA Archive)
Parents and grandparents face putting away more than £3,000 per year typically to help children onto the property ladder in adulthood, according to Quilter (Ian West/PA) (PA Archive)

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, Quilter

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

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