Martin Lewis warns over 'massively outperformed' ISA 'you can't access'

Martin Lewis warns over 'massively outperformed' ISA 'you can't access' Personal finance expert said parents and grandparents often start them off - but there are much better options Money expert Martin Lewis has given a warning about a type of ISA - and told potential investors they should put their money elsewhere. Mr Lewis, in a new video on Youtube, said the issue is around Junior ISAs and was particularly important for parents and grandparents. Many people open the accounts at birth or early on in their lives to save money for them - however he said there are issues - not least because the cash is locked away until their 18th birthday. A Junior Cash ISA is a long-term, tax-free savings account set up for a child in the UK. For children under 18 living in the UK. Parents or guardians with parental responsibility can open one, and 16- and 17-year-olds can open their own. It is of benefit because people can save an extra £9,000 £9,000 total for the 2026/27 tax year. This limit is separate from the person’s adult ISA allowance. Anyone such as parents, grandparents, family, and friends can deposit money into the account, as long as the total yearly limit is not exceeded. Mr Lewis said: “I would suggest most people opening a junior ISA should be looking at investing, not saving. And the reason I say that is because the golden rule about investing is that it should be money that you’re locking away for a long time, and it should be money that you don’t need. Well, with a junior ISA, the money is locked away until they are 18. So if you have a new grandchild, you’re locking it away for 18 years—so that’s tick one: investing, and not needing the money. Since they can’t access it, they don’t need it.” The ITV and BBC star said it would be ‘massively’ outperformed by an alternative type of investment. He said: “On the balance of probabilities, if you put it in a broad spread of investments—something like a global tracker fund that tracks 1,400 or so big companies across the world for their performance—it will massively outperform savings. So you might want to have a look, especially as a grandparent, because investment over the long run will generally outperform savings, and you are putting this in for at least 18 years for their future. While you could put it in a cash ISA, I would look at investing it for them; you never know, they might end up with a really big windfall.” Mr Lewis also explained that he’d been stopped by people while out and about asking about the investments and where to put the money. He explained: “I actually got stopped in the street by someone who said, ‘My dad’s been putting money in the S&P 500—which is the American stock market index—for the last 10 years, and he’s been making me put some of my money there too. He says it’s good for the future, and to remember it when I’m 50. Is he right?’ I told him to look at his balance, and his balance was just massively more than they had put in. Yes, his dad got it right. “We are too risk-averse in this country. If you can lock it away and you don’t need it—and you’ve generally got your own cash emergency fund saved up elsewhere—then you should be looking at investing. Also, when they’re 17, they’re going to need it to go to Zante, mate, if you know what I mean! Well, they can’t get it until they are 18, thankfully, so it is protected. But remember, when it comes to investing, I’m not talking about putting it into a single share; I’m talking about a big basket, spreading your risk across thousands of shares so you get the average performance of all of them.”