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Kids ISA

Tax free savings ideas for kids!
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.

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.

Kids ISA

Kids ISAs, also known as Children’s or Junior ISAs are a great tax-efficient way to save for your children’s future. Launched in November 2011 by the Government, they offer easy tax-free savings and investments. Each child is able to have one Cash ISA and one Stocks and Shares ISA at any time. Transfers are permitted between cash and stocks and shares Junior ISAs, or to another Junior ISA provider.

Kids ISA rules

  • The child must not already hold a Children's Trust Fund (CTF) account but you are able to transfer in to an ISA from a CTF
  • The child can have both a Junior Cash ISA and a Junior Stocks and Shares ISA in any given tax year, as long as the total amount invested during the year is no more than the annual allowance
  • If the child is under 16 someone with parental responsibility must open the Junior ISA
  • Funds in the account will be owned by the child it is opened for and will be locked in until the child reaches 18, the child assumes full responsibility of the account once their 18
  • Anyone can contribute to a child’s account at any time up to the annual limit
  • All contributions to a Junior ISA are a gift to the young person and cannot be returned to the contributor later if they subsequently change their mind.

Advantages of a Kids ISA

Junior ISAs provide parents, friends and family members with a convenient, tax-efficient way to save for a child's future. An added advantage is that the money saved in a Junior ISA stays tax-free once the child reaches the age of 18.

Who Can Open a Kids ISA?

One ISA can be opened per child and can be opened by anyone with parental responsibility over the child. Management of the ISA passes to the child when they turn 16. However, funds remain inaccessible until the child turns 18, after which they can either withdraw the funds, or have their account roll over into an adult ISA. The child assumes full responsibility of the money at 18, which could prove problematic if you have a specific savings goal in mind.

What are the Advantages of Kids ISAs?

  • Kids 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 Kids ISA stays tax-free once the child reaches the age of 18
  • The money is locked away until the child turns 18
  • If you want to save an annual amount for your child that generates over £100 in yearly interest, a Kids ISA ensures that this interest isn't taxed

Overall, Kids ISAs are a sensible way to start saving for your child. The one potential disadvantage being that the child assumes responsibility of the money once they’re 18 which could be a problem if you had something specific in mind for the savings. In which case, a savings account in your name may be a better option.

GUIDE TO JUNIOR ISAS

Give your child a great start in life

Junior ISAs are a popular way for family and friends to build up tax-efficient savings and investments for eligible children to help them with the cost of university, provide a deposit for a house or simply give them a great start in life.

This guide explains what a Junior ISA is, the rules and:

  • The age limit for Junior ISAs
  • How much can I invest in a Junior ISA?
  • The tax benefits of investing in a Junior ISA
  • Who can open a Junior ISA

Get a FREE Guide to Junior ISAs »

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.

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Jen

I found the way the different options are presented very clear - much more useful than some other comparison sites. I sent it to my daughter as well.

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