ISA Ideas

• Junior ISAs

Junior ISA Allowance

The junior ISA limit for 2013-2014 is £3,720 from 6th April 2013. A junior ISA offers a convenient, tax-efficient way to save for your child's future.

 

 

James Caldwell, Director

What exactly is a junior ISA?

Junior ISAs were introduced in November 2011 with the intention of replacing the now-defunct Child Trust Funds. Each eligible child receives an annual allowance, which gives parents, relatives and family friends a tax-free way of saving and investing for the child's future. Transfers can be made between junior cash ISAs and junior stocks and shares ISAs, and between ISA providers, but only one junior cash ISA and one junior stocks and shares ISA can be held per child at a time.

Why should I use my child's junior ISA allowance?

Recent research suggests that the vast majority of parents with children under 18 believe it's important to save on behalf of their child, but over half of those questioned said they hadn't heard of junior ISAs. Launched in November 2011, junior ISAs offer each eligible child an annual allowance - just like an adult ISA allowance - which can be put into a cash ISA and a stocks and shares ISA, in whatever proportion the adult opening the account chooses.

How much can I put into a junior ISA account?

The current junior ISA limit is £3,720, which means that parents, family members, or friends can shelter up to £3,720 per tax year for a child, by putting it into either cash or stocks and shares, or both. This limit will apply until 5th April 2014 and will then be updated annually in line with the Consumer Price Index (CPI).

Who is allowed to put money into a junior ISA? Are there any restrictions?

Anybody - family members, friends, or organizations - can contribute to a junior ISA on behalf of a child, but it must be set up by someone who has parental responsibility for the child. Once the child reaches 16, they can manage the ISA themselves, but they won't be able to withdraw any money from the account until they reach the age of 18.

Are there any regulations that make a junior ISA different from an adult ISA?

On the whole, junior ISAs are quite similar to regular adult ISAs in terms of rules and regulations. It's important to note that the junior ISA limit can be divided between a cash ISA or a stocks and shares ISA in whichever proportion you wish - this is one of the key differences between an adult Isa and a junior ISA. You can also switch a junior ISA from a cash ISA to a stocks and shares ISA, and vice versa, something which is not permitted under the current rules for adult ISAs.

 *Source: Family Investments

 See the tables below for more information on junior ISAs.

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 >