14th February 2022

Junior ISAs and other ways to save for your children

Investing in your child’s future is early is one of the best gifts they can receive, even if they don’t know it at the time. It is a wonderful gift that offers them flexibility and a financial platform to stand on, whatever their goals and dreams may be.

Like all investments, the sooner you start the better. Whilst we know a newborn baby may seem far away from taking their first steps, let alone their first steps into adulthood, the sooner you start, the more benefit you will see. If you want to help your children grow their own personal wealth, we’ve taken a look at the many options available for you, right now.
However you choose to save, your child will thank you for it.

1. Junior ISA
A great savings option, think of your standard adult ISA, but for children. This means it works in exactly the same way, the tax-free limit per year is slightly less than the adult alternative and the money can only be accessed by the child whose name is on the account. A Junior ISA can easily be opened by a legal parent or guardian for the child under the age of 18, when the child reaches 18, the account will automatically become an adult cash ISA, with the child in full control of the funds.  

With a Junior Isa, you have a choice between stocks and shares or a cash ISA, depending on what is best for you. A stocks and shares junior ISA is a savings account that enables you to invest in a range of stocks and shares on the market. They can be tailored, so you can choose the risk level, investment type and management style. At The Children’s ISA we have a wide range, from actively managed to ethical ISA’s, so you can select and open the account that feels right for you, your finances and your family. 

2. National Savings and Investments Premium Bonds
Premium Bonds can be bought from NS&I and given as gifts to children. With them, you can buy any amount of bonds between £25 and £50,000, with this every month every £1 bond is entered into a prize draw with prizes for £25 upwards. The NS&I offers secure investing that is backed by HM Treasury, which minimises the risks here. The amount you can win is up to one million, and all winnings are tax-free. However, the chances of winning are slim and no interest is earned on the bonds. 

3. Junior investment account
A junior investment account can be opened up by parents, grandparents and guardians and is issued using a Bare Trust agreement. This works in the same way as a regular investment account and has no limits on access, making this a strong choice for parents who have investment and financial knowledge. This type of account will come with a holding fee, though the interest acquired through a junior investment account often outweighs this.

4. Building Society savings accounts
Opening a bank or building society savings account will grant instant access to your child’s funds. Most banks offer a ‘small savers’ option, which helps your child learn the value of money and the benefit of saving. Teaching them valuable life lessons as well as creating a strong financial future for them.  

© The Children’s ISA Ltd 2022. All rights reserved.

The website and the information contained therein should not be regarded as an offer or solicitation to conduct investment business in any jurisdiction other than the UK. Past performance is not necessarily a guide to future performance and the value of your investment may fall as well as rise, and any income received in the form of dividends may fluctuate. You may not get back the full amount when the account is closed. If paying regular monthly contributions please bear in mind that if contributions are not maintained you will be less likely to achieve the investment amount that was originally projected.

The information on this website is not advice, it is provided solely to enable you to make your own investment decisions. The investments and /or investment services referred to may not be suitable for all investors.

The Children’s ISA Limited is authorised and regulated by the Financial Conduct Authority. (FCA No: 563043)
The Children’s ISA Limited is a company registered in England and Wales. Registered Company Number: 07486015

Registered Office: Unit 2, Digital Park, Pacific Way, Salford Quays, M50 1DR