A welcome boost for the next generation or a perk for the wealthy? Tucked away in this week’s budget, and overshadowed by all the coronavirus measures, was news that the government is doubling the amount parents can out into Junior Isas.

These are long-term, tax-free savings accounts for children, and currently you can put £4,368 per tax year into one on behalf of a child under 18. However, from next month this will be upped to £9,000 a year.

Junior Isas were launched in 2011 with the aim of building up a pot to help with things such as the cost of university or the deposit on a house, and there are thought to be roughly a million or so active ones. The savings can’t be withdrawn until the child reaches 18, at which point they are legally entitled to do what they like with the cash.

The increase means a parent opening a Junior Isa next month for a newborn child could build a pot of more than £240,000 by the time the child reaches 18, assuming they put the maximum in and it grows by 4% a year after charges, says Laura Suter at investment platform AJ Bell.

There are two types – cash-based, and stocks and shares – and your child can have either or both types.

With financial markets in turmoil, some parents will be wary about going down the stock market route, though with up to 18 years to play with, many experts would argue that this is where you need to be. But to be fair to cash Junior Isas, the interest rates are pretty good – in some cases a lot better than those on standard adult savings accounts. For example, Coventry building society has one paying 3.6%, while a number of providers are paying 3.25%, including National Savings & Investments, Santander, TSB and Bath building society.

With investment Junior Isas, there are a huge range of options in terms of shares, funds, indices etc, depending on whether you want help or are happy to go it alone. A good first port of call may be a company such as AJ Bell or Hargreaves Lansdown, both of which offer their own Junior Isas.

Becky O’Connor at insurer Royal London says the accounts are a great way to give your children a head start in adult life, but adds: “In reality, though, most people save far less into them than the maximum. According to HMRC figures, the average subscription in the 2017-18 tax year was £994 per account. So raising the threshold is a bit of an empty gesture for all but the wealthiest Isa savers.”