Leanne Macardle

Leanne Macardle

Editor
Published: 06/12/2018

At a glance

  • 16 and 17-year-olds currently get two ISA allowances: £4,368 for a Junior ISA and £20,000 for an adult cash ISA.
  • Your child can open a Junior ISA if they don't have a Child Trust Fund (CTF) and are under the age of 18.

Maybe it's deliberate, maybe it's just an oversight, but 16 and 17-year-olds currently get two ISA allowances: £4,368 for a Junior ISA and £20,000 for an adult cash ISA.

That's because they're allowed to open an adult cash ISA from the age of 16 alongside their Junior ISA, which won’t get turned into an adult cash ISA until they turn 18. So, under the current rules, they could squirrel away up to £24,368 in ISAs for the 2019/20 tax year.

Your child can open a Junior ISA if they don't have a Child Trust Fund (CTF) and are under the age of 18. If your child is a UK resident and born between 1 September 2002 and 2 January 2011, they should be enrolled in the CTF scheme (a CTF will have been opened by the Treasury on their behalf if you did not use the Government voucher sent to you).

Under current rules, CTF holders will also be able to open a cash ISA at the age of 16 and have the same dual allowance as Junior ISA holders. And since April 2015, Child Trust Funds can be transferred to Junior ISAs, giving you plenty of options.

Why choose an ISA over a children's savings account?

ISAs pay interest tax-free. When your child becomes a taxpayer or they earn more than their Personal Savings Allowance, their savings interest may get taxed. By putting it in an ISA, a child's savings pot becomes shielded from taxation.

Junior ISAs can't be accessed until your child turns 18, so they will only have access to their cash at an important time in their lives – to help get through university or to start driving, for example. Children’s savings accounts, in contrast, could be accessible earlier. 

Moneyfacts tip

Moneyfacts tip Leanne Macardle

If you are in any way unsure of the tax treatment of you or your estate if you deposit on behalf of a child, you should seek independent advice.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

girl smiling with sunglasses on

At a glance

  • 16 and 17-year-olds currently get two ISA allowances: £4,368 for a Junior ISA and £20,000 for an adult cash ISA.
  • Your child can open a Junior ISA if they don't have a Child Trust Fund (CTF) and are under the age of 18.

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