Below we've compiled some common questions about how this scheme works. We hope you find this information useful.
Your child is eligible to open a new 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). However, old CTFs can be transferred to Junior ISAs, giving you plenty of options.
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.
No, the Government will not make any contributions into your child's Junior ISA.
Banks, building societies, friendly societies and other financial providers offer Junior ISAs.
A Junior ISA can be opened by anyone with 'parental responsibility' for a child or, if your child is between 16 and 18, they can open their own.
Grandparents can't open a Junior ISA for their grandchildren (unless they have parental responsibility for the child). However, grandparents will be able to contribute to the account once it is opened.
You can save or invest up to £4,368 into a Junior ISA in the 2019/20 tax year (which runs from 6 April to the following 5 April).
Money in your child's Junior ISA can only be accessed by the child once they turn 18.
The account becomes an adult ISA, preserving its tax-efficient status.
Your child can hold one cash and one stocks & shares Junior ISA at any one time.
You can choose how you allocate money between the two, so long as you don't exceed the total annual limit.
Other than the annual cap there is no limit on how you choose to save – you could place the entire allowance in a stocks & shares Junior ISA, although you then couldn't place any money in a cash Junior ISA in that tax year (or vice versa).
Yes you will, although your child will only be able to hold one cash and one stocks & shares Junior ISA at any one time.
Yes, from April 2015 Child Trust Funds can be transferred to Junior ISAs.
How much your child's nest egg will be worth will depend on:
Remember that any funds placed in investments can fall as well as rise in value.
Until the child reaches 16, those who have parental responsibility for the child will need to manage the ISA. Once the child reaches 16, they can start to manage their own pot (although they can't make any withdrawals until they are 18).
Yes. Between the ages of 16 and 18, your child can have a Junior ISA and an adult cash ISA. Under the 2018/19 ISA limits, that means they can have £24,260 between a Junior ISA and an adult cash ISA (£24,368 in 2019/20)
At 18, the Junior ISA becomes an adult one, and your child will be able to save or invest up to the adult ISA limits only.
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. For a more comprehensive comparison between child savings accounts and Junior ISAs, why not check out our guide on savings accounts for children?
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.