The cost of higher education in Britain is becoming an increasingly heavy burden for graduates. The Department of Education estimates that full-time undergraduates starting in 2024/25 will borrow an average of £44,690 during their studies, with just over half expected to repay the full amount. Under Plan 5, which applies to students enrolling from 2023 onward, repayments kick in once earnings exceed £25,000, with a 9% charge on anything above that threshold.
The debt doesn’t stand still, either. Interest begins accruing from the first payment and continues building for up to 40 years. According to Dan Coatsworth, head of markets at AJ Bell, 2024/25 undergraduates will likely finish their studies with roughly £53,000 in debt, a figure that, at a conservative 5% annual interest rate, could balloon to over £86,000 within a decade. Against that backdrop, Junior ISAs (JISAs) are attracting growing attention as a planning tool, allowing parents to invest up to £9,000 per tax year on a child’s behalf, completely tax-free.
The Power of Early, Consistent Investing
The numbers behind consistent JISA contributions are striking. AJ Bell data shows that parents paying £750 per month into a cash JISA from their child’s eleventh birthday would accumulate £67,675 over seven years, assuming 2% monthly interest. Shift that money into a market-based vehicle (such as the Vanguard FTSE All World ETF) and the pot grows to £100,143 over the same period.
Rob Morgan, chief analyst at Charles Stanley, recommends M&G Global Dividend as a “great longer-term holding to help drive more consistent performance across market cycles.” Managed by Stuart Rhodes, the fund spans quality income stocks, asset-backed companies, and faster-growing opportunities. Notably, it delivered a top-quartile return of 4.6% in 2022 (a difficult year for equities) while the sector average registered a 1.2% loss. Morgan notes that when the child turns 18 and the JISA converts to a standard ISA, units can be switched from accumulation to income, “effectively turning the tap on an income stream that could help towards education costs.”
Balancing Growth and Protection as the Clock Ticks
For families starting later, the balance between growth and capital preservation becomes more critical. Sheridan Admans, founder of Infundly, suggests pairing Nutshell Growth, which has delivered an annualized return of 13.7% in sterling terms since its 2020 inception, with Troy’s £5.2bn Trojan fund, which offers protection through high exposure to gold and bonds. “For parents starting saving later in their child’s life, for example at age 11, a higher allocation to Trojan may be prudent to protect accumulated gains,” Admans said.
For higher-risk appetites, Simon Woodacre of Quilter Cheviot points to Scottish Mortgage Investment Trust, a £13bn vehicle that has gained 425.9% over ten years to February 2026. According to Woodacre, its investments in pioneering businesses, including Anthropic and SpaceX, “could compound returns over time and help grow the portfolio to a meaningful size by the time the child needs to pay for university fees.” The key, across all strategies, is starting early enough to let time do the heavy lifting.
