Junior ISAs turn two - ISAs - News - Moneyfacts

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Junior ISAs turn two

Junior ISAs turn two

Category: ISAs

Updated: 01/11/2013
First Published: 01/11/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Today marks the second anniversary of the Junior ISA market, with new research showing that for the first time the majority of parents are aware of these tax-free savings vehicles.

According to Family Investments, 57% of parents are now familiar with Junior ISAs, compared to just 27% when they were first launched in 2011 and 44% last year.

On top of this, HMRC figures reveal that sales of Junior ISAs have jumped by 315% over the last two years, from 71,000 in the 2011/12 tax year to 295,000 in 2012/13.

What are Junior ISAs?

Junior ISAs are much like their adult counterparts in that interest earned is not taxed.

There are two types – cash and stocks & shares – which are available to children up to the age of 18 who do not qualify for a Child Trust Fund (CTF).

Up to £3,720 can be invested in a Junior ISA for the 2013/14 tax year. This can be split between cash and stocks & shares, or fully invested in either.

They can be opened by parents and grandparents on behalf of a child.

Two key differences between adult ISAs and Junior ISAs:

  • Junior ISAs don't allow switching from cash ISAs to stocks & shares ISAs and back again.
  • Funds invested in a Junior ISA cannot be withdrawn until the child turns 18.

What Next?

Compare Junior ISAs

Read our guide on Children's Savings to find out more about the difference between a CTF and Junior ISA

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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