How to open a Junior ISA in the current 2020/2021 Tax Year
If you are thinking about starting a savings account so you can put aside money for your child’s future, you may be considering a Junior ISA (JISA). These accounts are long-term, tax-free savings for children, which they will have access to when they turn 18.
When it comes to opening a Junior ISA, there are some conditions that need to be followed, so we’ve put together an easy guide for you to see if your child would be eligible.
Who can open a Junior ISA?
A Junior ISA can be set up by a parent or guardian, registering their details as the primary contact until their child turns 16.
Your child must live in the UK and be under the age of 18. If your child is living outside of the UK, you can only open a Junior ISA if they depend on you for care or you are a Crown servant.
Children aged 16 or 17 can open a Junior ISA themselves.
What if my child already has a child trust fund?
If your child already has a child trust fund, they won’t be able to open a Junior ISA at the same time, however you can ask your chosen provider if you can transfer your child’s trust fund to the Junior ISA.
What if my child already has a Junior ISA?
If your child already has a Junior ISA with another provider, you can transfer to the Foresters Junior ISA. You should check any conditions your existing provider may have but we can manage the transfer on your behalf making it easier and quicker for you.
How to open a Junior ISA with Foresters Friendly Society
Here at Foresters Friendly Society, you can open a Junior ISA with a lump sum of £500 or set up a direct debit from £50 a month to make regular payments.
You can also top up the account as and when you want. During the current 2020/2021 tax year, the saving limit for a Junior ISA is £9,000 which needs to be used before this year’s entitlement ends and the allowance refreshes to £9,000 for the next tax year.
Anyone (such as Parents, Grandparents, and Relatives etc.) can contribute to the account’s funds, but no one can access the savings. As the child’s parent or guardian, you will manage the account until they turn 16, at which point they can then take control. Once your child turns 18, they will then have access to the funds to either reinvest into an adult ISA or spend as they please.
If you’re interested in opening a Junior ISA for your child and want to find out more about how it works then request an information pack today!
You should be aware that in some investment conditions your child may not get back the value of the original investment. Tax rules may change in the future and depend on individual circumstances. Inflation will affect what your child can buy when they cash-in their Junior ISA.
This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.