What is a Junior ISA?

This decade has seen a fair share of unprecedented change, and change that has naturally led to us thinking more about our futures. Future planning has never been as prevalent as it is now – and planning for the future can be achieved no matter the challenges we face.

This includes putting savings in place for your child’s future in the form of a Junior Individual Savings Account (JISA). No matter what dreams you have for your children, saving for them can help unlock a range of opportunities. By thinking of their future now, you could help with the purchase of a first car, the deposit on a home, or even assist with education costs.

Learn more about JISA saving in our handy Junior ISA guide, featuring information on how to open a Junior ISA and much more. Read on.

Junior ISA Guide: What is a JISA?

So, what is a Junior ISA? A Junior ISA, also referred to as a JISA, is a long-term, tax-free savings account for children, which has been designed specifically to help secure your child’s financial future.

There are a whole host of reasons why parents or guardians wish to save for their children’s future. From a travelling savings pot to assistance with a deposit for a first home, university fees or a wedding fund, a Junior ISA is a convenient and flexible way to invest in your child’s future. It also adds reassurance that they’ll be financially secure and have savings growing as they do.

How do Junior ISAs work?

How exactly do Junior ISAs work? A Junior Individual Savings Account must be opened by the child’s parent or guardian and is available for children aged 0 to 18 years old who are living in the UK. Children aged 16 and 17 can open a Junior ISA themselves. Once the account is opened, it is possible for family and friends of the child to also pay money into the account – perfect for birthdays.

Parents or guardians can open a Junior ISA and manage the account; however, the funds within the account belong to the child.

What are the types of Junior ISA?

There are two types of Junior ISA available:

  • A cash Junior ISA – this means that you will not pay tax on any interest accrued on the cash you save into this account.
  • A stocks and shares Junior ISA – this means that your money is invested, and you will not pay tax on any capital growth or dividends you receive as a result.

What is the Junior ISA allowance?

This is the set savings limit that can be paid in total into the account each tax year. The current Junior ISA allowance is £9,000 for the 2023-2024 tax year.

Anyone can pay money into a Junior ISA, but the total amount paid in cannot go over £9,000 in the 2023-2024 tax year.

Often a Junior ISA will need to be opened with a set minimum amount, after which you could make continued regular payments or lump sum top-ups.

How many Junior ISAs can you have?

When it comes to Junior ISAs, your child can have a Junior Cash ISA, a Junior Stocks and Shares  ISA or both. If both are held, the combined total which can be saved this year will still need to be within the annual Junior ISA allowance.

Unlike Adult ISAs where you can have a number of ISA accounts from different tax years, your child can only hold one cash Junior ISA and one stocks and shares Junior ISA. So if your child already has a stocks and shares Junior ISA with £5,000 saved into it and you want to open a new stocks and shares Junior ISA, you will need to transfer the £5,000 into it.

What are the features of a Junior ISA?

A Junior ISA from Foresters Friendly Society boasts a wealth of features:

  • It is a simple and straightforward way of saving for your child’s future
  • Open a Junior ISA from just £26 a month
  • Flexible payments – these can be made as regular payments or lump sums
  • You, your friends and family can all pay into the Junior ISA
  • A Junior ISA has the potential to earn annual and final bonuses
  • You can transfer an existing Junior ISA or Child Trust Fund to Foresters
  • Your child will have access to Foresters Membership Benefits at no additional cost
  • Money has the potential to grow through being invested in a top performing With Profits fund

You should be aware that your child may get back less than you have paid in. Tax rules might change and depend on individual circumstances. Bonuses are not guaranteed. Member benefits are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

What happens to a Junior ISA at 18?

Once the child turns 16, they will be able to take control over the account. However, they are not able to access the funds in their Junior ISA until they turn 18.

When your child turns 18, their Junior ISA automatically becomes an adult ISA. Find out more about our range of adult savings and investment plans here.

Which is better – a Child Trust Fund (CTF) or Junior ISA?

A Child Trust Fund (CTF) offered long-term tax-free savings for children; however, this scheme ended in January 2011. Parents or guardians can now apply for a Junior ISA instead.

If your child has an existing Child Trust Fund (CTF), you can transfer the funds from this into a Junior ISA by contacting the Junior ISA provider.

A Foresters Friendly Society Junior ISA accepts Child Trust Fund (CTF) transfers. Find out more here.

Open a Junior ISA today  

If you would like to find out more about opening a Junior ISA and the benefits of starting to save for your child’s financial future, contact us today.

One of our friendly, expert team will be on hand and ready to advise you on our Junior ISA and all its features. Find out how you can start saving for your child’s future milestones today.

Our Junior ISA is a stocks and shares ISA so in some investment conditions your child may not get back the full amount originally invested. Tax rules may change and depend on individual circumstances.

The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser. You may have to pay for this advice.