Junior Individual Savings Accounts are a great way to create a nest egg & help provide some financial backup for your child when they reach adulthood and can be used to pay for their university fee’s or even help them set a foot on the property ladder.
Once you have deposited money into a Baby ISA and provided it stays there, it will be tax free year upon year.
The same limitations, benefits and rules that apply to a regular stocks and shares ISA also apply to a Junior ISA for children which include:
Once your child has reached adulthood (currently 18 years of age) they are able to withdraw their cash whenever they want without losing any tax benefits. Management of the account will pass onto the child once they reach 16 years of age.
Tax Free Junior ISA’s are covered by the FSCS / Financial Services Compensation Scheme so you can be sure your investment is safe.
The annual Junior ISA Tax Allowance is currently £3840 (2014/2015 tax year).
Parents, grandparents, friends and anyone else with an interest in the child’s financial future can contribute to their Junior ISA (provided the total amount is no more than the annual limit).
There are two types of Junior ISA: A cash Junior ISA and an Investment Junior ISA (Stocks and shares Junior ISA) and each child will be able to hold one of each account with different providers should they wish but the total combined investment allowance between the two accounts remains at £3840 (2014/2015 tax year).
Baby ISAs are available to any child born on or after 3rd January 2011 and any child under 18 years of age born before September 2002
If you are at all unsure towards the suitability of a junior isa or any other investments
then we strongly suggest that you speak with an independent financial advisor.