Junior Investment ISAs
Junior ISAs are long-term, tax-free savings accounts for children under-18 and cannot be accessed or cashed in before this time. In the 2017 to 2018 tax year, the savings limit for Junior ISAs is £4,128.
As long as the child doesn’t already hold a child trust fund, they can be opened by the child’s parent or guardian with the proceeds being invested on behalf of the child. The funds have to be invested for at least 5 years, so if your child is over 13, a Junior Stocks & Shares ISA may not be suitable.
How junior investment ISAs work
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 plan may not be worth as much as has been paid in on maturity.
There is a risk that the company backing the plan may be unable to repay any investment, for example if they were to cease trading. In this instance Junior Stocks & Shares ISAs are eligible for the Financial Services Compensation Scheme (FSCS) up to £50,000 per person, per institution.
The tax advantages of Junior ISAs may change in the future and will also depend on the child’s individual circumstances. If you are in any doubt about the risks associated with these plans or their tax treatment you should seek advice from an Independent Financial Adviser.
For all the Junior S&S ISAs available below, you should be aware that 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.
MoneySuperMarket doesn’t offer a comparison service for this type of product but we have compiled a list below of providers who can help.