Junior ISA Limit
The Junior ISA limit for the 2019/20 tax year is £4,368.
What is a Junior ISA?
Junior ISAs are a savings initiative launched by the government in November 2011 in order to replace the Child Trust Funds. Each child is entitled to the annual allowance which provides parents, relatives and family friends an easy way to save for a child’s future.
Transfers can be made between Junior Cash ISAs and Junior Stocks and Shares ISAs as well as between providers. You can also convert your Child Trust Fund in to an ISA but you will not be able to open a Junior ISA without transferring the Trust Fund first. A child may only hold one Junior Cash ISA and One Junior Stocks and Shares ISA at the same time.
Why Should I use my Child's Junior ISA Allowance?
There are advantages and disadvantages to ISAs but it’s good to be aware of all your options. 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.
Cash ISAs are becoming less popular due to the dwindling interest rates and many savings accounts now offer a higher rate. Children are also entitled to the Personal Savings Allowance so if you’re planning on saving an amount under the limit, a savings account could offer you a better deal.
Who is allowed to Put Money into a Junior ISA? Are there any Restrictions?
Anybody can place money in to the account. 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 nobody will be able to withdraw any money from the account until the child reaches the age of 18 when full responsibility transfers to the child.
Are there any regulations that make a Junior ISA different from an Adult ISA?
On the whole, Junior ISAs are very similar to regular adult ISAs in terms of rules and regulations
- Savings and investments cannot be cashed in before the child reaches 18 when they will assume full control
- Like adult ISAs, you can divide the Junior ISA allowance between cash and investments in whatever proportion you wish
- Children who already have a Child Trust Fund do not qualify for a junior ISA. However, you are able to transfer the trust fund to an ISA
- A young person aged 16 can open their own Junior ISA. They can also open a regular cash ISA as well
- An adult with parental responsibility may open a junior ISA on behalf of someone aged under 16 years old
- Anyone can contribute towards the Junior ISA once it is opened, including grandparents, family members and friends
- All money contributed into a junior ISA is considered a gift and cannot be subsequently returned to the giver if they change their mind
- No withdrawals can be made from the account, until the child turns 18 at which point the account rolls over into a normal type of ISA, in their name, and they can do with it whatever they wish