Why You Should Start Saving for Your Children with a Junior ISA
Fact Checked
28th September 2023
If you’re looking for a way to start saving for your children, a Junior ISA could be the perfect solution to help you to build a secure financial future for your children.
What is Junior ISA?
A Junior ISA is a tax-efficient savings account specifically designed for children under the age of 18. Any growth in a Junior ISA is free from UK tax.
What types of Junior ISA are there?
A Junior ISA can be either a Junior Cash ISA or a Junior Stocks and Shares ISA. At Four Wealth Management, we offer a Junior Stocks and Shares ISA. This means that the account is invested in funds; a financial adviser at Four Wealth Management will review your goals for your child’s future and recommend investments suitable for them. All investments will be regularly reviewed for your peace of mind knowing that your child’s investments are being actively managed.
If you start investing when your child is young, either a lump sum each year or a small amount monthly then your child has a long time period for the investments to hopefully grow in value over time. A Junior Stocks and Shares ISA gives your children’s savings more potential to grow in value and outperform inflation.
To discuss opening a Junior ISA for your child, book a no-obligation meeting with a financial adviser at Four Wealth Management online or by calling 0117 973 0500
How much can you save into a Junior ISA?
The amount you can save into a Junior ISA each tax year is currently £9,000 for the 2022/23 tax year. You can invest this as a lump sum or you can contribute an amount you choose monthly via direct debit.
Any money invested into a Junior ISA will benefit from the same tax-free benefits that an adult ISA has. This makes investing for children much easier and more affordable. By investing in a Junior ISA, you can help your child build a nest egg that they can use in the future.
What age does the child have to be to have a Junior ISA?
A child just has to
be under the age of 18 to have a Junior ISA. The earlier you open a Junior ISA, the more time you have to build a nest egg for your child’s future.
What happens to a Junior ISA at age 18?
When a child turns 18, a Junior ISA turns into an adult ISA. This is still a tax-efficient savings account and any further investment growth continues to be free from tax. When they turn 18, they can now access the money, however you can encourage them to keep the money invested until they need to make large purchases such as a car or house.
How do you open a Junior ISA?
A parent or guardian must open a Junior ISA on behalf of a child. However, once the Junior ISA is open anyone can contribute such as grandparents or other family members up to the maximum annual limit of £9,000 per tax year.
Contact Four Wealth Management
To discuss opening a Junior ISA for your child, book a no-obligation meeting with a financial adviser at Four Wealth Management online or by calling 0117 973 0500
At Four Wealth Management, we have been providing bespoke financial advice to families for decades. Based in Bristol and covering the South of England we provide financial advice to families covering all areas of financial planning such as retirement planning, tax planning, family protection policies and saving for your children.
