Parents and grandparents face putting away more than £1,950 per year on average to help their children get on the first rung of the property ladder in adulthood, according to new calculations by Quiller.
The financial adviser reports that a child born in Scotland in 2021 would need annual contributions of at least £1,952 paid into their Junior Isa account (Jisa) to be able to afford the average UK first-time buyer deposit once they reach the age of 18.
Their research estimated that the average first-time buyer deposit will increase by 2% each year and it also assumed a 4% return on savings.
Commenting on the report, 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 in Scotland will need contributions of £1,952 each and every year for 18 years in order to generate a pot big enough to afford a deposit when they reach adulthood."
She added: "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 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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