nEWS AND INSIGHTS

Junior ISAs explained

Saving for a child or grandchild will help to give them a head start in life and help to teach them about money and the importance of saving for the future.

What is a Junior ISA?

A common way to save for children is to open a Junior ISA which is for children under the age of 18. When the child reaches the age of 18, it automatically changes into an adult ISA so the child can manage the ISA their self.

What is the Junior ISA allowance?

In the 2019/20 tax year, the maximum amount you can save for your child into a Junior ISA is £4,368. If you wish to save more than this for your child then you will also need to look into alternative methods to hold alongside the Junior ISA.

Advantages of a Junior ISA

One of the primary advantages of saving into a Junior ISA is that the assets are held tax efficiently in the ISA.

The money cannot be accessed by the child until they are 18 which means it is a good way to save for your child’s future and know that the money will not be spent beforehand. Saving into a Junior ISA will help give your child a great start to adult life whether they choose to use it to pay towards a house deposit, university or something else.

At Four Wealth Management, we offer a Junior Stocks & Shares ISA. Any investment growth is also tax efficient. A financial adviser will review the Junior Stocks & Shares ISA annually to assess whether it is in line with the goals you have for your child’s future.

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Opening a Junior Stocks & Shares ISA

You can start open a Junior Stocks and Shares ISA for your child if they are a UK resident, under the age of 18, and don’t already have a Child Trust Fund or Junior Stocks and Shares ISA elsewhere. If your child already has a Junior ISA, you will need to transfer it rather than opening a new one. Your Financial Adviser will work with you to make the transfer as quick and easy as possible.

A Junior ISA must be opened by a parent or guardian. Once the account is set up, anyone can contribute up to the annual allowance. For example, grandparents or other family members can make contributions such as birthday gifts.

Start saving for your child’s future today

Contact Four Wealth Management to find out more about starting a Junior ISA for your child.

The value of a Junior ISA with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.

The favourable tax treatment of Junior ISAs may be subject to changes in legislation in the future.

Learn more about investment planning for your family.

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