New Skipton research reveals education overtakes homeownership as the top use of Junior ISA funds
Parents who spent years carefully saving into Junior Individual Savings Accounts (Junior ISAs) with a first home in mind are finding those funds rarely reach a mortgage deposit.
New research from Skipton Building Society, based on 1,000 young adults aged 18 to 25 whose Junior ISAs have matured, reveals a stark gap between aspiration and outcome — one that has direct implications for brokers already working with clients who arrive with smaller deposits than expected.
Three quarters of respondents said they had considered directing their matured savings towards a future house deposit. In practice, just 22% followed through. The most common use of the funds was education: more than one in four young adults (27%) used the money to help cover the costs of university or vocational training. A further 24% spent it on everyday living costs, 20% on socialising or personal purchases, and 14% used it to pay off existing debt.
The ambition gap brokers are already seeing
For mortgage advisers, the findings put data behind a pattern that is increasingly familiar at the point of application. Solo first-time buyers face saving for almost a decade before they can afford to purchase their first home, with affordability remaining one of the biggest barriers to homeownership despite a range of government initiatives aimed at supporting first-time buyers. When savings earmarked for a deposit are redirected in young adulthood, that timeline stretches further still.
In 2024–25, over a third of first-time buyers in the UK had some assistance raising a deposit, either in the form of a gift or loan from family or friends, or through an inheritance. The Skipton data suggests that even where family savings vehicles exist, the pressures of early adulthood are slowly absorbing them before they can play that role.
What makes the Skipton research notable is that the regret is acknowledged. Nearly two thirds of respondents (66%) said they would do something differently if they were making the decision again. Eight in ten said access to financial guidance at the point their Junior ISA matured would have been helpful, and 95% said they would find it appealing to transfer some or all of their savings into a product with a financial incentive linked to a first home purchase.
A policy window worth watching
That 95% figure is not merely a consumer sentiment reading; it also speaks to a live regulatory and product debate. The government has confirmed that the Lifetime ISA will be replaced with a new First Time Buyer ISA, due to launch in April 2029. The timing is significant: Junior ISAs were introduced in 2011, meaning the first cohort of young people who held one from birth will turn 18 in 2029.
Jazz Gakhal, chief executive of Money at Skipton Building Society, is calling on the government to capitalise on that alignment. "Following the government's confirmation of the new First Time Buyer ISA, there is an opportunity to create a clearer pathway from childhood saving to homeownership," Gakhal said. "Giving eligible young adults the option to move some or all of their matured Junior ISA savings into the new First Time Buyer ISA could help more families turn years of careful saving into a meaningful step towards owning a home."
For brokers advising first-time buyers (FTBs), the practical question is what this means in the interim. The Lifetime ISA remains one of the most effective deposit-building tools available for younger buyers, and from 29 October, eligible first-time buyers purchasing a property above the £450,000 Lifetime ISA cap will pay a lower withdrawal charge, reduced from 25% to 20%. Those updates are worth raising proactively with younger clients who may be unaware of the shifting landscape around savings products.
What brokers can do now
The Skipton data offers a useful prompt for advisers to revisit conversations with first-time buyer clients about savings history — not to scrutinise past decisions, but to understand what resources remain available and how best to structure a path towards a deposit.
For clients approaching 18 or who have recently had a Junior ISA mature, flagging the new First Time Buyer ISA and what a transfer pathway could look like may become a natural part of the advice process from 2029 onwards.
Around a third (34%) of Gen Z adults now aspire to buy a new or first home in 2026, more than double the national average, according to Barclays' Property Insights report. That appetite is there. The challenge, as the Skipton research makes clear, is that the financial infrastructure to support it is not yet joined up — and the advice community is well placed to help bridge that gap.
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