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Nov 2020

My First ISA: ISAs for Under-18s

My First ISA: ISAs for Under-18s

Every UK resident aged 18 and over has the entitlement to a £20,000 allowance that you can put into a tax-free ISA wrapper every tax year; but what about those under the age of 18? While they can't open an account themselves, your best option is a Junior ISA. 

What's an ISA?

An ISA is a fund where you can hold your money with a tax free wrapper, meaning that you won't pay tax on any returns you make from the interest on these accounts.

  • You are able to put £20,000 this tax year (April 6th 2020-April 5th 2021)
  • Your allowance won't roll over to next year - so use it, or lose it
  • You won't be charged any tax on the returns you gain
  • There are many different kinds of ISA, including Cash ISAs, Stocks and Shares ISAs etc. 

Why can't under-18s open an ISA? 

An ISA is a type of account which is legislated by the government; while someone under the age of 18 can open a regular savings account, they cannot open an ISA. 

In order to open an ISA, you need to be: 

  • Aged 18+ 
  • A UK resident 

What options do under-18s have? 

The best option you have for opening an ISA under the age of 18 is to talk to your parent or guardian about opening a Junior ISA. 

This is an account which is designed to help parents enable their children to engage with ISAs and get a leg up on stocks and shares before they turn 18 and go out into the big, bad world. 

Because it is an ISA account, the money you put into a JISA is invested, and the returns on that investment are protected from income tax and capital gains tax. 

There is a limit on the amount you can put into a JISA account. This is legislated by the government and had the potential to change each year; the limit for the current tax year (2020/2021) is a very generous £9000. 

What are the advantages of junior ISAs?

  • Junior ISAs provide parents, friends and family members with a convenient, tax-efficient way to save for a child's future.
  • The money saved in a junior ISA stays tax-free once the child reaches the age of 18.
  • The money is locked away until the child turns 18 which, depending on when you open the ISA, gives you plenty of time for the interest to grow. 
  • A child is able to start managing the money in the account from the age of 16; you won't be able to access it until you are 18, but you can gain control of the account from the age of 16. 

Read more about Junior ISAs.

Junior ISAs

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.

Lifetime ISAs

Lifetime ISA

from Hargreaves Lansdown

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Over 2,500 Funds, Investment Trusts, Bonds, ETF's or Cash
  • Invest From: £100 single or £25 per month

Why we like it: Easy set up in a matter of minutes. Start with as little as £25 and save up to £4,000 per year. Wide choice of stock market linked investments, or can be retained in cash. Fund factsheets and investment tools available. Simple annual management fee of 0.45%. There may be some other charges depending on the investment choices. Hargreaves Lansdown are regulated by the Financial Conduct Authority and are covered by the Financial Services Compensation Scheme. Capital at risk.

  • Open in five minutes
  • Open with lump sum, regular contributions or transfers from existing ISA's
  • Contribute up to £4,000 per year until you’re 50
  • Get a 25% government bonus: For every £4 you invest you receive a £1 bonus
  • Use your savings to buy your first home up to a value of £450,000, or use as retirement income
  • You can contribute to both a stocks and shares Lifetime ISA and a ‘regular’ stocks and shares ISA in the same tax year
  • Must be UK resident aged 18-39
  • If you need to access your money for any other reason, you’ll pay a 25% penalty
  • Annual account charge of 0.45%
  • Dealing and other charges will depend on the investments you choose and will apply in addition to our annual account charge
  • Tax rules can change and their benefits depend on your circumstances. Lifetime ISA allowance forms part of the overall £20,000 annual allowance
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

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