ISA Ideas

• Junior ISAs

Children's ISAs

Give your child a great start in life with a junior ISA - you use their allowance to save tax-efficiently for their future in both cash and investments.

 

James Caldwell, Director

 

Children's ISA

Children's ISAs first became available in November 2011. The Government introduced children's ISAs - known as junior ISAs - to replace Child Trust Funds (CTFs), which are no longer available.  Junior ISAs can provide an easy and convenient way to save for your child's future, in a tax-efficient way.

What are the rules for children's ISAs?

In terms of rules and regulations, ISAs for children are similar to adult ISAs.

• Only one children's ISA per child can be held at a time
• Switching providers is allowed, and is usually free.
• Unlike Child Trust Funds, junior ISAs don't involve any Government contribution.
• A junior cash ISA can be opened by the child's parent or legal guardian.
• Once the child reaches 16, they'll be able to manage their own account. However, they won't be able to withdraw funds until they reach the age of 18.
• Any child who already has a child trust fund is ineligible for a children's ISA.
• Family, friends and grandparents can all contribute to the ISA account (within the annual limit), making a junior ISA a good way to save for a child's future.

How much cash can I put into a children's ISA?

The annual deposit limits on children's ISAs are different from standard adult ISAs. The 2013/14 tax year allowance for children's ISAs is £3,720.

There are several options available when it comes to deciding how to use this allowance - the money can either be put into a junior cash ISA in its entirety, or it can divided between a junior stocks and shares ISA and a junior cash ISA, in whatever proportion you wish.

Points to consider when choosing a children's ISA

• The annual pre-income tax earnings threshold for everyone in the UK - whether child or adult - is £9,440 for the current tax year. Therefore, most children are able to earn tax-free interest with any savings plan, not just a junior ISA, as long as the parent opening it on their behalf fills out an R85 form when setting up the account. However, if you are in a position to contribute funds to your child's ISA that generate over £100 per year in interest, a junior ISA can help you avoid paying tax on this.
• Once your child reaches 18, the money is theirs to spend however they choose. If you're concerned about money being wasted on non-essential items, you might want to save for your child's future in your own name, instead.
• The money is locked up until your child turns 18, so think carefully about whether you can afford to leave cash untouched for this period of time, and only save an amount that you're able to afford.

Junior ISAs

Provider	Junior ISA Provider	Regular Savings	Investment Options	Online Valuations	More Info
	JP Morgan Junior ISA		Over 850 Funds to choose from with no initial transaction charge or annual account charge. Invest up to £3,600 per year, per child. Invest from £50 per month or lump sums of £500.		More Info >
	Fidelity Junior ISA		Over 1200 Funds from over 70 Investment Companies		More Info >
	Family Investments Junior ISA		Invest in worldwide stocks and shares and fixed interest investments. Receive a £20 Boots Voucher when you set up a Direct Debit online (terms and conditions apply)		More Info >
	Shepherds Friendly Junior ISA		A range of assets including UK and global shares, bonds and cash		More Info >
	Sippdeal Junior ISA		A range of investment opportunities, including all the FSTE 350 companies.		More Info >
	Scottish Friendly Junior ISA		A range of assets including UK and global shares, bonds and cash		More Info >