Post Office Junior ISA
The Post Office Junior ISA is designed to provide a child with a tax-efficient lump sum at the start of their adult life.
It can be set up by parents and legal guardians of the child with a regular Direct Debit from as little as £10 per month or a lump sum of £500 or more. You can also transfer from an existing Junior ISA or from a Child Trust Fund.
Once the account is opened anyone can contribute by Direct Debit, bank transfer or cheque. The only limit is the maximum amount per year: £4,128 for the 2017/18 tax year.
However, once the child turns 18 only they will be able to access the money.
Junior Stocks and Shares ISAs
As this is a Stocks and Shares ISA, it is subject to management fees. Post Office charge an annual management charge of 1.5% and other additional expenses of approximately 0.2% of the value of the fund.
Investment ISAs allow you to invest for your child’s future. They can be opened by the child’s parent or guardian with the proceeds being invested on behalf of the child. Once the child reaches 18, the plan can be cashed in or transferred to an adult ISA, but the plan cannot be accessed or cashed in before this time.
In these plans your capital is not protected meaning there can be fluctuations in the capital value of the plan, which can vary dependent on the risk category of the funds invested in. This means that there is a risk that the money paid in may not be worth as much as it initially did once the account matures. However, there is also the possibility of greater returns.
As this is an investment ISA, ideally you should be looking to put away the money for five years or more to allow for rises and falls in the market to settle so if your child is over 13, a Junior Stocks & Shares ISA might not be suitable.
How to Open an Account
You can open a Post Office Junior ISA with a regular Direct Debit from as little as £10 per month or a lump sum of £500 or more.
You are able to transfer in to this account from another provider by filling in a form and you will be able to transfer to another account with another provider at any time.