Parents putting money aside for their children in Premium Bonds could be leaving thousands of pounds of potential long-term growth on the table by playing it too safe, with new Fidelity International analysis showing £1,000 could have grown to £5,274 more over the past 15 years if invested in a global tracker instead.
Fidelity’s research1 among 1,000 UK parents of children under 18 shows that cash remains the default for many families. Among parents who put money aside for their children, 43% use a Cash Junior ISA, compared with just 20% who use a Stocks & Shares Junior ISA, while 15% use Premium Bonds. Overall, 86% use some form of cash saving.
And Premium Bonds remain a significant home for children’s money. Data obtained by Fidelity from NS&I shows around 850,000 children under 16 own Premium Bonds, while the average holding period for Premium Bonds bought since 2005 is around 10 years2.
As Premium Bonds turn 70 on 1 November – the same day Junior ISAs celebrate their 15th anniversary – Fidelity has looked at what that long-term preference for saving rather than investing could mean for children’s money.
Premium Bonds at 70, Junior ISAs at 15: what could £1,000 have become?
Fidelity looked at what £1,000 put aside when Junior ISAs launched in November 2011 could be worth today if it had been invested in a global tracker through a Junior ISA, compared with being held in Premium Bonds.
| Global tracker through a Junior ISA3 | Premium Bonds | |
| Total contributions | £1,000 | £1,000 |
| Value today | £6,619 | £1,345 |
| Growth | £5,619 | £345 |
| Difference in final pot | £5,274 |
Fidelity also looked at what 15 years of maximising the Junior ISA allowance could have achieved. £89,836 of contributions invested in the same global tracker could have grown to £232,071 – more than £142,000 of investment growth4.
“Premium Bonds have an enduring appeal for families. They offer security and the possibility of a tax-free prize, so it is easy to understand why parents and grandparents have used them to put money aside for children for generations.
“But when you are saving for someone who may not need the money for 10, 15 or even 18 years, being too cautious can carry a cost of its own. Inflation can eat away at spending power, while staying out of markets means giving up the potential for long-term growth.
“Cash has an important role, particularly for money that may be needed sooner. But for money that can be left untouched for many years, parents should think about whether playing it safe today could mean giving their child less of a financial head start tomorrow.”
Jemma Slingo, Pensions and Investment Specialist at Fidelity International, comments:
Premium Bonds are part of a wider preference for playing it safe
Fidelity’s research suggests that 15 years after Junior ISAs were introduced, parents remain much more likely to use them for cash than investments.
Among parents who put money aside for their children:
| Savings / investment option | % of parents who use it |
| Ordinary cash savings account | 51% |
| Cash Junior ISA | 43% |
| Stocks & Shares Junior ISA | 20% |
| Premium Bonds | 15% |
| Any form of cash saving | 86% |
That preference for cash goes beyond the products parents currently use. Asked what they would do if they were given £100 to put towards their child’s future, 61% said they would save it, compared with just 17% who would invest it.
Part of this may come down to confidence and understanding. Just 39% of parents believe investing delivers better long-term returns than cash savings. A quarter (25%) believe cash performs better, 15% think the two perform about the same and 21% are unsure.
Yet hindsight tells a different story. Almost a third (32%) of parents wish they had started saving or investing for their children earlier, 21% wish they had learned more about investing and 16% say they wish they had invested rather than saved in cash.
There are some signs that attitudes may be changing. Almost three in ten (29%) 18–34-year-old parents who put money aside use a Stocks & Shares Junior ISA, almost double the 15% of those aged 35–54.
Jemma Slingo concludes: “Parents naturally want to protect money they are putting aside for their children, but ‘safe’ does not always mean ‘best’ over a long time horizon.
“Parents do not have to make an all-or-nothing choice between cash and investing. The important thing is to think about when the money will be needed. Cash can play an important role for money needed sooner, while investing may give money that can stay untouched for many years more opportunity to grow.
“It is encouraging that younger parents appear more likely to use a Stocks & Shares Junior ISA, but cash remains the default for many families. Children have something adult investors often wish they had more of: time. For long-term money, making use of that time could make a meaningful difference to the financial head start parents are able to give them.”
1Source: Research was conducted by Opinium on behalf of Fidelity International from 10 August – 24 August 2026 among 1,000 UK parents of children under the age of 18.
2Source: NS&I data obtained by Fidelity International, 2026.
3Source: Fidelity International calculations. Global tracker returns are based on the iShares Core MSCI World UCITS ETF USD total return series in sterling from 1 November 2011 – 2 October 2026.
The calculation assumes £1,000 invested at the start of the period, with returns reinvested and no platform fees. £1,000 would have grown to £6,619. The Premium Bonds calculation uses historic NS&I prize fund rates and assumes £1,000 was held in time for the November 2011 draw, returns matched the average prize fund rate over the period and winnings were reinvested. Actual returns for individual Premium Bond holders could have been considerably higher or lower.
4Source: Fidelity International calculations using the historic annual Junior ISA allowance applicable in each year since launch, which has increased over time.