Every grandparent wants what’s best for their little ones, little ones. And, as we all know, there are a huge number of options for either saving or investing on behalf of a grandchild. To clear up the number one question grandparents ask us: no, a grandparent cannot open a Junior ISA on their grandchild’s behalf – only a parent or guardian can do that. However, once it’s open, anyone, including grandparents, can contribute. Now let’s dive into what else a grandparent could wish to know about Junior ISAs. 

1. Can contributions exceed the annual limit if multiple family members contribute?

No matter how many people contribute, the total annual deposit should not surpass the yearly limit set by the government. For the financial year 2023/24 the annual limit is £9,000.

2.  Can grandparents top up a Junior ISA if they live abroad?

Absolutely. Distance doesn’t matter when it comes to making contributions. Grandparents living overseas (regardless of where) can contribute to their grandchild’s Junior ISA, but be aware of possible bank charges or exchange rates.

3. Can grandparents set up a standing order for a Junior ISA?

Yes, setting up a regular payment is an excellent way to ensure consistent contributions. Just ensure that it’s in sync with the parent or guardian overseeing the account to avoid breaching annual limits.

4. Can multiple Junior ISAs be opened for a single grandchild?

A child can have one cash and one stocks & shares Junior ISA at any given time. But of course, a grandparent can pay into multiple accounts if there is more than one grandchild. 

5. Can grandparents access the Funds in a Junior ISA?

The money in a Junior ISA is locked away until the child turns 18. Like parents, grandparents can contribute, but they cannot withdraw or use these funds as they belong to the child. 

6. Can grandparents change the investments within a Stocks & Shares Junior ISA?

No, the management of the Junior ISA, including investment decisions, falls under the jurisdiction of the parent or guardian who opened it. However, grandparents can always offer advice or suggestions.

7. Can Junior ISAs impact the child’s future tax responsibilities?

The beauty of Junior ISAs is that they are tax-free savings accounts (up to the annual limit). When the child turns 18, their ISA converts into an adult ISA, continuing its tax-free status.

8. Can grandparents contribute to both a Child Trust Fund (CTF) and a Junior ISA?

If a grandchild has a CTF, they cannot have a Junior ISA simultaneously. Contributions can continue to the CTF, or they can be transferred to a Junior ISA. However, CTFs were replaced by Junior ISAs in 2011 so it is unlikely that many of these legacy accounts will exist but it is worth double checking. 

9. Can grandparents gift a Junior ISA contribution in their will?

Given the potential issues around inheritance tax and annual contribution limits, this could be a potential minefield. We would suggest that you check with your Independent Financial Adviser (IFA) before any decisions are made with regard to estate planning and Junior ISAs.

10. Can a grandparent’s contribution to a Junior ISA be considered as part of their Annual Gift Allowance?

Yes, money gifted to a grandchild’s Junior ISA can be considered under the annual gift allowance, if the grandparent is UK-based This means grandparents can potentially reduce the size of their taxable estate by gifting within this allowance. As always, it’s wise for grandparents to consult with an IFA  to understand how their contributions align with gift and inheritance tax guidelines.

Grandparents play an indispensable role in shaping a grandchild’s future. If any grandparents want any more information on Junior ISAs we have prepared a guide here.  While they might not open a Junior ISA directly, their contributions and involvement can significantly impact these financial nest eggs. Check out our little book of savings, a great guide to The Children’s ISA and the benefits of starting early and, if we can be of any more assistance please feel free to contact us here.