A Junior ISA is a great way to save for your niece or nephew’s future. They offer tax-free savings and the investment growth is tax-free, up to the annual limit. However, you cannot open a Junior ISA for them – only a parent or guardian can do that. An aunt or uncle can, however, pay into their Junior ISA. In this piece, we will explore the benefits of Junior Stocks and Shares ISAs and what happens to investments when stock markets lower. We will also look at how the stock markets have performed over time and, as we get ever closer to Christmas, why Junior stocks and shares ISA is a perfect gift which you probably won’t get thanked for, not just yet, anyway.
With a Junior ISA, from the Children’s ISA, it’s easy for aunts and uncles, grandparents and godparents to pay into it online with ease. The Children’s ISA will then invest the money in stocks, bonds and other assets to help it grow. With a Junior Stocks and Shares ISA, your niece or nephew can benefit from the power of compounding interest; as the savings within their ISA grows, so does the amount of interest earned on those savings. Over time this can lead to the savings growing much faster than with a cash Junior ISA, or savings account.
When it comes to investments, the FTSE 100 has been good for investors over the past decade. Over this time, it has gone up and down but overall its performance has been positive. If your niece or nephew had invested in the FTSE 100 back in 2010, their portfolio value would have grown significantly. In bear markets and recessionary environments, many people are tempted to retrench their spending, especially on long-term investments. However, over time, these periods can offer some of the best opportunities for investors.
At The Children’s ISA, the parent or guardian of the child can choose from a range of funds including ethical and Sharia. They can also choose the element of risk they are prepared to take with the investment. Recently inflation has become a feature of our economy, something which hasn’t been the case for many years. Fortunately, the Children’s ISA has designed their funds to beat inflation, over the long term. How? This is done by diversifying investments across asset classes, sectors and regions. Feel free to speak to one of our members of staff at our Manchester office if you would like some more information.
In conclusion, a Junior ISA is a great way to save for your niece or nephew’s future. They offer tax-free savings and the investment growth is tax-free. An aunt or uncle can pay into their Junior ISA but cannot open one on their behalf. With the right fund choice, your niece or nephew can benefit from the power of compounding interest and, over time, their savings should grow sustainably. So this Christmas, as well as the usual toys and games, why not give your niece or nephew a gift that will last them past the taking down of the Christmas decorations?
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