10 things you need to know about junior ISAs (JISAs)
Whether you’ve recently become a parent or just started looking at options for your children, a junior ISA (JISA) can be a great way to give your child financial support at the start of adulthood.
Here’s everything you need to know to decide if it’s the right product for you.
1. Junior ISAs are tax-free savings or investment accounts for children
Neither you nor your child will have to pay any tax on the money they take out of their JISA, no matter how much it’s grown.
Your child can have a JISA alongside other savings or investment products, such as a tax-exempt savings plan or a children’s savings account. They can’t, however, have a JISA and a child trust fund at the same time.
2. There are two types of junior ISA: ‘cash’ and ‘stocks and shares’
Cash JISAs hold the money in cash, which means it’s not invested and instead grows by building interest, like a regular savings account.
Stocks and shares JISAs invest the money you pay in into an investment fund, which invests in the stock market. The fund buys shares in various assets and its value changes as the value of those assets goes up or down.
Find out more: Junior ISA: cash vs stocks and shares
3. Most children under 18 years old can have a junior ISA
Parents or legal guardians can open a JISA for any child under 18 year old, as long as the child lives in the UK and doesn’t already have a child trust fund. The child must be under 16 to have a OneFamily Junior ISA opened for them.
If your child already has a child trust fund in their name, you can transfer their child trust fund into a junior ISA.
4. Only a child’s parent or legal guardian can open a junior ISA for them
You must have parental responsibility for a child to open a JISA in their name. So, grandparents and other family members can’t open a JISA for a child, unless they’re their legal guardian.
Find out more: Who can open a junior ISA?
5. A child can have both a ‘cash junior ISA’ and a ‘stocks and shares junior ISA’ in their name
A child can’t have more than one of each type of JISA open at the same time, but they can have one of each: a cash JISA and a stocks and shares JISA.
If a child has more than one JISA in their name, the JISA allowance will be shared between both accounts.
6. Anyone can pay into a child’s junior ISA
Friends and other family members can all pay money into a child’s JISA. Children can even pay into their own JISAs once they’re old enough to have their own bank account to pay in from.
Find out more: Paying into a junior ISA
7. You can pay up to £9,000 into junior ISAs in a child’s name each tax year.
The junior ISA annual allowance resets at the start of each tax year, on 6 April.
It’s important to note that the £9,000 pay-in limit is for each child, no matter how many JISAs they have in their name. If your child has two JISAs, then this limit will be shared between both accounts.
8. Only the child the junior ISA is for can access the money in the account, and only when they turn 18.
When you pay money into a JISA, this is a gift to the child and can’t be taken back.
This means that, even as a parent, you can’t withdraw any money from a JISA that has been opened for your child.
Find out more: What happens to your junior ISA when you turn 18?
9. Your child can take control of their junior ISA when they turn 16.
Until the child turns 16, the parent or legal guardian who opened the JISA will manage it as the Registered Contact for the account. The child then has the option to take over.
Once the child takes over, they’ll be able to manage and keep track of their own account, but they won’t be able to take any money out until they’ve turned 18. At this point, they’ll automatically become the Registered Contact and will have to register for their own online account.
10. A child’s junior ISA doesn’t affect their parents’ ability to claim benefits
As a JISA is under the child’s name, it isn’t seen as being part of their parent’s savings so isn’t taken into consideration if a parent applies for means-tested benefits, such as Universal Credit.
However, the money might affect the child’s eligibility for their own benefits when they turn 18 and can access the money.
Looking for more information about junior ISAs?
If you have questions we didn’t cover, take a look at our Junior ISA hub and our Junior ISA FAQs.
OneFamily Junior ISA
With our stocks and shares Junior ISA you can start investing from just £10 per month up to a maximum of £9,000 each year on behalf of a child. Anyone can pay in, and the child will gain access to the account once they are 18 years old.
Stocks and shares JISAs have good long-term growth potential, but the value of your investments can go up or down and you child could get back less money than you’ve put in.
More about junior ISAs
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How does the annual junior ISA allowance work?
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How are junior ISAs different to child trust funds?
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Junior ISAs vs child savings accounts
If you're thinking of saving for your child's future, you might have heard of junior ISAs and child savings accounts. Find out which one could better suit your needs.
How a junior ISA could help you save on inheritance tax
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