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Junior ISAs /

Ethical Junior ISA

Invest up to £9,000 tax free for your child!

Investment ISAs put your capital at risk & you may get back less than you originally invested

Junior Ethical Stocks & Shares ISA

from Nutmeg

Regular Savings
  • Invest From: £100 lump sum
  • Investment Options: Nutmeg offer a socially responsible junior investment ISA which places emphasis on environmental and social and governance factors. Capital at risk.

Junior Stocks & Shares ISA (Sustainable Leaders Fund)

from Royal London

Regular Savings
  • Invest From: £25 a month or any lump sum
  • Investment Options: The core of the investment portfolio consists of shares in companies involved wholly or in part in the manufacture of products, industrial processes or the provision of services associated with improving the environment and the enhancement of human health and safety. Capital at risk.

Junior Sustainable Stocks & Shares ISA

from Shepherds

Regular Savings
  • Invest From: £10 pm
  • Investment Options: The fund aims to invest in sustainable companies that offer long-term growth, while making a positive difference to the world your child grows up in. Capital at risk.

Junior Stocks & Shares ISA (Future World ESG Developed Index Fund)

from Legal & General

Regular Savings
  • Invest From: £25 per month
  • Investment Options: Invests in broad developed stock markets, such as the US, Japan and Europe. Capital at risk.

Responsible Global Equity

from BMO

Allows ISA Transfers
Regular Savings
  • Fund Choice: Invests in companies whose operations are considered to be making a positive contribution to society and seeks to avoid companies which, on balance, are felt to be harming the world, its people or its wildlife. Capital at risk.
  • Invest From: £25 pm

Junior Stocks & Shares ISA

from Interactive Investor

Regular Savings
  • Invest From: £25 pm
  • Investment Options: Choose from more than 40,000 UK and global investment options for your child's ISA. Capital at risk.

Junior Stocks & Shares ISA

from Hargreaves Lansdown

Regular Savings
  • Invest From: £25 pm
  • Investment Options: Invest in over 3,000 funds, UK and overseas shares, investment trusts and ETFs. Capital at risk.

Junior Stocks & Shares ISA

from Nutmeg

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

What is an Ethical Junior ISA?

An Ethical Junior ISA (JISA) is a tax-efficient savings account for children that invests with an ethical reasonability in mind.

Ethical Junior ISAs are a type of Stocks and Shares JISA, meaning that they invest in the stock market via funds, shares and other investment vehicles.

An Ethical JISA’s underlying investments can either be self-selected or they can be picked for you by a portfolio manager at a higher cost.

This guide will explain everything you need to know about Ethical JISAs. It will also compare the most important features and help you find the best Ethical Stocks and Shares Junior ISA for you.

What are the different types of Ethical Junior ISAs?

The main two types of Ethical JISAs that you can choose between are self-invested JISAs and ready-made Ethical JISAs.

Self-invested Ethical Junior ISAs

Self-invested, or self-select JISAs are facilitated through investment platforms where you pick your own underlying investments to hold in a Junior ISA.

You can choose from a huge range of investments within a self-invested JISA, from funds and shares to ETFs and Bonds. To ensure it is ethical, you need to make sure the companies and funds you purchase are ethical funds – more on this later.

Ready-made Ethical Junior ISAs

A ready-made Ethical JISA portfolio will have the underlying investments chosen by an investment professional. They will make sure your JISA invests in ethical funds and companies and manage and balance the portfolio on a day-to-day basis.

You will usually choose a risk profile or complete a risk questionnaire to determine the best portfolio for you, as most providers categorise their ethical portfolios by exposure to risk.

Because of the expertise and ongoing fund management required to run of a ready-made portfolio, you have to pay more in charges for this kind of Ethical JISA.

What is an Ethical investment?

The definition of an Ethical investment is somewhat down to your own preferences. If you are creating your own portfolio, it could just be shares of a company that operates in a sustainable and environmentally friendly sector, like green energy.

However, managed ethical funds are more specific, tailored investments managed towards a fixed ethical criterion.

Managed funds, such as unit trusts and OEICs, work by pooling investors’ money together and then spreading it across multiple different companies to diversify the portfolio.

An ethical managed fund will tend to avoid certain industries, such as:

  • Armaments
  • Fur trade
  • Pornography
  • Alcohol Production
  • Tobacco Production
  • Gambling

In addition, ethical funds will often define themselves as ESG funds that aim to adhere to certain Environmental, Social and Governance standards:

Environmental Factors:

  1. Fighting climate change
  2. Sustainable practices
  3. Reducing waste and energy usage

Social Factors:

  1. Fighting for human rights, including race and gender equality
  2. Protecting their customers
  3. Treating employees and suppliers fairly

Governance Factors:

  1. Paying fair and sustainable salaries and bonuses to executives
  2. Transparent and open financial reporting
  3. Working ahead of regulatory changes

Why invest in an Ethical Junior Stocks and Shares ISA?

Putting your child’s ethical savings and investments in a JISA wrapper is the most tax-efficient way to save for their future. The two main investment taxes will not apply to their savings:

  • Capital Gains Tax (CGT) - the tax on the growth of their underlying ethical investments
  • Dividend Tax – the tax on the dividends that most ethical investments pay

As your money invests in the stock market, the potential for long term returns is far greater than those in a Junior Cash ISA.

Although you may experience periods of volatility, over the long term your investments can rise significantly in value. Your child’s savings are generally likely to be held for longer periods compared to other savings accounts, so this compliments stock market investments.

How to pick the best Ethical Junior Stocks and Shares ISA?

In order to find the best Ethical JISA provider for you, there are several key factors to keep in mind:

  • Do you want a self-select or ready-made portfolio?
  • What are the Annual Management Charges?
  • Are there any ad hoc charges such as dealing fees or account closure fees?
  • How good are the provider’s customer service ratings?
  • What investment risk level do you need? (if choosing a ready-made portfolio)
  • What investment research do they offer? (if picking the ethical investments yourself)

How do I open an Ethical Junior Stocks and Shares ISA?

When you have chosen your JISA provider, you need to open the account for your child with a debit card contribution or Direct Debit instruction. You can do this online, over the phone or by post.

When you have contributed your funds, you either purchase your ready-made ethical portfolio or start selecting your own ethical investments to buy within your Stocks and Shares JISA.

Oliver Roylance-Smith
Edited by Oliver Roylance-Smith - ISA.co.uk

Frequently Asked Questions

As the JISA will be in the name of your child, you will not be able to make any withdrawals until they are 18. At this point, the JISA will convert into a standard ISA in your child’s name and they can then make a withdrawal If they wish.

Each child has an annual JISA allowance of £9,000 in the 2021/22 tax year. Make sure that yours and anyone else’s contributions to your child’s JISA do not surpass this annual threshold.

Anybody can add money to your child’s JISA; however, the accounts must be set up and managed by a parent or legal guardian.

To contribute to someone else’s JISA, you will just need the account reference number and some of the child’s personal information.

Yes, you can transfer any existing Cash or Stocks and Shares JISA into a new Ethical Stocks and Shares JISA.

You will need to complete a transfer form with your new JISA provider.

You also need to transfer 100% of any previous JISAs because you can only have one JISA open per child at any time.

You can also transfer a Child Trust Fund (CTF) into an Ethical Junior ISA in the same way.

The JISA will convert into a standard ISA in the child’s sole control.

Yes, your underlying ethical investments can go both up and down in value, particularly over short-term periods.

Boost your financial future and make the world a better place

The future of investing isn’t just about making a profit. More and more people want their investments to have a positive impact on the world.

The good news is you can do both. 

There’s a growing trend that gives you the opportunity to grow your money, and build yourself a better financial future, while tackling global environmental, social and governance (ESG) issues. Download your factsheet to discover:

  1. Why you should consider ESG issues when investing
  2. How you can do it
  3. Three funds to consider

Get FREE Factsheet from Hargreaves Lansdown »

Important Risk Information:

Important: Investments can go down in value as well as up, so your child could get back less than you invest. The information on this page isn't personal advice - if you’re not sure if an investment is right for you or your child, please ask for advice. ISA tax rules can change and their benefits depend on individual circumstances.

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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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