15th July 2022

Saving for the future – the low down on our Junior Investment ISAs

It is natural to want to save for the next generation and, our Junior Investment ISA (JISA) can help you do just that. There is a myriad of options available for parents (or grandparents) when it comes to investing for a child’s future, here’s the low down on our Junior Investment ISAs.

Tax implications

With a Junior Investment ISA, you don’t have to pay income tax or capital gains tax on the investment returns. You can invest up to £9,000 for each child in the 2022/23 tax year, but they can’t touch the money until they are 18 years old. Any tax advantages mentioned are based on personal circumstances and current legislation which might change in the future.

Junior Cash ISA or a Junior Investment ISA 

At the Children’s ISA, we focus on investment ISAs. We have developed a range of Junior Investment ISAs that can offer higher returns than a Junior Cash ISA (based on historical performance, over the longer term and especially during periods of high inflation). Please be aware, however, that all investments, come with an element of risk and the value can go up as well as down. 

Do you have a Child Trust Fund?

If you have a child who was born between 2002 and 2011, they may have a Child Trust Fund. This is an account where the government gives the child free cash to put into the account. The amount depends on the family’s income. Now, these accounts have been replaced by Junior ISAs. If your child has a Child Trust Fund, you can now add money to it every year or convert it into a Junior ISA.

Who can open a Junior ISA?

A JISA can be opened by a person who is responsible for a child who is younger than 18 years old. The money in the JISA will belong to the child and the person responsible for the child will be named on the account as their registered contact. The registered contact will receive all statements and correspondence relating to the account, and will also decide which investments to make with the money. No withdrawals can be made until the child turns 18 years old.

What happens to a Junior ISA when the child turns 18?

On their 18th birthday, the account will automatically become an adult ISA. The responsibility for the ISA will no longer be with the registered contact and the child will have full authority over it. The child can then also access the funds if they wish.

© The Children’s ISA Ltd 2024. 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