In the UK, individuals can open a Stocks and Shares ISA from age 18, with an annual allowance of £20,000. Over 13 years — by age 30 — that’s a potential £260,000 in contributions.
Even with strong returns, that alone likely won’t reach £1m. In fact, it would require 20% annual returns to hit £1m in time — that’s incredibly hard to achieve over the long run.
But starting earlier changes everything.
While a child can’t open an ISA themselves, a Junior Stocks and Shares ISA can be opened by a parent or guardian from birth. Once the child turns 18, the Junior ISA converts into a standard ISA, allowing them to continue investing tax-free.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Here’s how it could work
Consider this — if a parent contributes £500 per month from birth and the investments grow at an average 10% annually, the child’s portfolio could exceed £1.13m by age 30. Once again this rate of growth is no easy feat, but it’s certainly achievable.
Here’s how that growth plays out:
- By age 10: £102,422
- By age 20: £379,684
- By age 30: £1,130,243
Over 30 years, £180,000 in total contributions generates over £950,000 in investment growth. Remember, that’s entirely tax-free within the ISA wrapper.
This highlights the power of long-term compounding. Even smaller monthly contributions can produce substantial results over time. The earlier the investing starts, the greater the potential benefit.
While not every family can afford £500 per month, any consistent investment — especially if started early — gives children a significant financial advantage.
And once they take over the ISA at 18, they can continue contributing and building on that early momentum.
Stocks and Shares ISAs remain one of the most efficient ways to build long-term wealth in the UK — and when used from day one, they can be genuinely life-changing.
Where to invest?
The hardest part is knowing where to invest. Index trackers are a great way to gain exposure to the stock market in a very diversified manner. But some investors may prefer to pick trusts, funds and individual stocks. There’s higher risk here, but also the potential for greater returns. It’s also possible to combine both approaches.
One stock I like right now is Salesforce (NYSE:CRM). Despite its premium valuation — trading at an enterprise value-to-sales of 5.6 times, Salesforce is down meaningfully from its five-year average multiples — this tells us it could be cheap compared to historical norms.
What excites me is Salesforce’s growing leadership in agentic AI. This is AI that can plan, reason, and act on a user’s behalf. With Einstein Copilot and its Data Cloud, Salesforce is embedding AI deeply into enterprise workflows, potentially making it a central platform in the AI productivity stack.
The company also trades at a forward price-to-earnings-to-growth (PEG) ratio of 1.27, below both its sector and historical averages. This hints at better risk-adjusted growth than the raw multiples suggest.
However, investors should be wary that Salesforce is navigating slowing growth in core CRM and a crowded AI market. If it fails to monetise agentic AI meaningfully, today’s valuation could prove excessive. Still, the possibilities are compelling.
I believe it’s worth considering. UK investors can buy this American stock if they have completed a W-8 BEN form through their brokerage. This allows them to buy US shares.
