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14th
Dec 2020
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A Christmas JISA: The Gift that Keeps on Giving

A Christmas JISA: The Gift that Keeps on Giving

The toys on the most-wanted Christmas year are the usual: Legos and Barbies and cuddly toys dominate the top-ten list. But one gift that fails to make it onto kids’ “Dear Santa” List is a JISA. A Junior ISA is a gift which will keep on giving – gaining interest in the years to come. But what is it – and how do you get one? Our elves have put together a quick blog to let you know all the details. 

Very few children will have a JISA at the top of their Christmas list – but we think that they should. A Junior ISA is an excellent tax-efficient way for parents to put money aside to help give your child or children a solid start in life.

While a toy might be the more exciting package to find under the Christmas tree, in a few years it will likely be a long forgotten relic of the terrible twos or threes which is simply gathering dust in the attic. A JISA, while arguably less shiny and visually stimulating, is of far better long-term value and might be a good idea as a gift for a child – be it your own or belonging to a friend or family member.

What is a JISA?

A Junior ISA is an ISA which is set up by the parents or guardian for the child; it’s a type of Stocks and Shares ISA which enables you to put money into your child’s name. This gives your child an established stock-free savings fund in their own name, giving them a leg up into the stock market.

These are investment accounts where the money is invested, and the capital gains made on returns from the investments are tax-free, because these are kept within the tax-free ISA wrapper.

This way, your child’s JISA savings have access to a wider range of investment types, such as equity funds and investment trusts.

Great, so what do I need to know?

If you want a JISA for your child, there are some key factors you need to know before you start researching providers.

Some key rules include:

  • You can open a Junior Investment ISA if your child is under 18 and a resident in the UK.
  • Only a parent or guardian can open an account for a child.
  • Anyone can put money into the account – grandparents, friends, cousins alike.
  • You can open both a Junior Stocks and Shares ISA and a Junior Cash ISA for your child – but if you are putting money into both, you need to keep this amount below the annual limit.
  • Your child won’t have access to the money until they are 16. At this point, they’ll be able to manage the funds, and they’ll be able to withdraw the funds/sell the investments when they are 18.

How do I open a Stocks and Shares JISA?

  • You can chose to open a JISA in your child’s name - the account can only be opened by a parent or guardian. The majority of JISAs can be opened with a deposit of only £1, so getting started with this form of saving is very easy. Some providers enable you to open your account online, so this will minimise fuss.
  • How much can I invest?
  • Like all ISAs, there is a cap on how much you can put into this account which is applied each tax year.
  • For tax year 2020/2021, you can invest up to £9,000 into any Junior ISA account.

Will it cost me anything?

If you are thinking of opening a Junior Investment ISA for you child, you need to be aware of any costs you might incur as these might decrease the returns you can expect from your child’s account.

  • Although the fees charged will vary from provider to provider, the majority will charge the following:
  • Transfer charges
  • Dividend investment fees
  • Buying charges
  • Selling charges
  • Fund switch charges
  • Bid/offer spread
  • Fund managers charges
  • Platform charges
  • Transfer out fee

Read more about Junior ISAs and Junior ISA options. 

Junior ISAs

Junior ISA

from Nutmeg

  • Investment Options: Invest in one of four expertly designed portfolios depending on your investment style

Why we like it: Open with a lump sum from £100 to £9,000 in the 2021/22 tax year. After initial investment top up any time with no minimum. Simple, transparent - Invest in one of a range of four expertly designed portfolios depending on your investment style. All four Nutmeg investment styles are built by experts and use exchange traded funds to diversify across stocks, bonds, industries, even countries. Choose the one that works for you. No exit fees and you’re free to make adjustments. You can see where your Junior ISA is invested and how it’s performing. Withdrawals possible from age 18. You can also transfer an existing Junior ISA or Child Trust Fund. If you need any help, financial advisers and customer support will answer any questions you have

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Junior Stocks and Shares ISA

from Hargreaves Lansdown

Regular Savings
  • Investment Options: Invest from £25 per month or deposits of £100.

Why we like it: Invest for your child from £25 pm tax free. A wide range of top performing funds to choose from. The annual charge for holding investments in a Hargreaves Lansdown Junior ISA is never more than 0.45%. Your dealing and other charges will depend on the investments you choose.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Junior ISA

from Interactive Investor

Regular Savings
  • Investment Options: Choose from more than 40,000 UK and global investment options for your child's ISA.

Why we like it: ii offer a flat fee service which over time could save you money compared to platform providers who charge on the value of investments held. ii offer ready made funds including their ethical funds which allows you to invest in line with your principles covering environmental, social and governance factors.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

My Select Junior ISA

from Scottish Friendly

Regular Savings
  • Investment Options: Invest from £10 a month or a £50 deposit

Why we like it: Invest tax-free from £10 a month or a £50 lump sum — or a mix of both. You can raise, lower, stop and restart your payments any time you like. Offers a selection of eight funds to choose from, so you can tailor your child's investment.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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