Guide to Junior ISAs & Investments

Your friendly guide to Junior ISAs

Growing kids, future expenses. You could help them get ahead of the game when they reach adulthood with a Junior ISA.

Here’s some information that could help...

So, what is a Junior ISA?

A Junior ISA (JISA) is a way to save or invest money for your child's future. It's an Individual Savings Account specially designed for children, offering tax efficient benefits. Using it to save or invest, you could build a tidy sum that belongs to them and which they can access when they turn 18.

Tax treatment depends on individual circumstances and tax rules may change in the future.

What kinds of Junior ISA are there?

Cash Junior ISA

Similar to a regular junior savings account but with an extra advantage. It allows you to save money for your child without paying taxes. The interest earned remains untouched by the taxman.

Investment Junior ISA

This type of Junior ISA invests in various assets, such as funds, bonds, property, or stocks and shares. It also grows absolutely tax efficiently, excluding any tax already paid, like dividends from UK shares.

Scottish Friendly doesn't provide advice. The information provided could help you decide if a Junior ISA is suitable for you or your child. If you're not sure whether a Junior ISA is suitable, you should contact an independent financial adviser for advice. Advisers may charge for providing such advice and should confirm any cost beforehand.

Is my child eligible?

Your child is eligible for a Junior ISA if:

They’re a UK resident.
They’re under 18 years old.
They weren't eligible for a Child Trust Fund.

Your child was eligible for a Child Trust Fund if they were born on or after September 2002 or before January 3rd, 2011.

How much can I save or invest in a Junior ISA?

In the current tax year, you can invest a total of £9,000 in Junior ISAs.

Your child can have a Cash Junior ISA and an Investment Junior ISA as long as you stay within the annual savings and investments limit. This allowance can be divided between both types of Junior ISAs (Cash and Investment) and the tax year starts on the 6th of April each year.

Please remember, tax treatment depends on individual circumstances and tax law may change in the future.

OK, let’s find the right Junior ISA for your child

Finding the best Junior ISA can be a bit overwhelming, but don't worry. While we can't provide personal advice, we can help you understand the key differences.

Take a look at the table below to help you decide which option suits your childs needs best.

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	Cash Junior ISA	Investment Junior ISA
How much can I save or invest each tax year?	£9,000 in the current tax year less any amounts subscribed to an Investment Junior ISA.	£9,000 in the current tax year less any amounts subscribed to a Cash Junior ISA.
Who can get one?	UK residents under 18 who weren’t entitled to a Child Trust Fund.	UK residents under 18 who weren’t entitled to a Child Trust Fund.
Who can contribute?	Anyone, though the Cash Junior ISA must be set up by a parent or legal guardian first.	Anyone, though the Investment Junior ISA must be set up by a parent or legal guardian first.
Short or long-term investment?	Long-term - locked away until the child turns 18.	Long-term - locked away until the child turns 18.
Is there risk involved?	No. The value of the initial investment steadily acquires interest until child reaches 18. Bear in mind that fluctuating interest rates could mean that the return your child receives on the money could struggle to outpace inflation.	Yes. While the long-term potential returns are greater, the value of the child's investment can go down as well as up and they could get back less than you have paid in.
Can I switch between accounts?	Yes, you can switch to another Cash Junior ISA or Investment Junior ISA. Keep in mind the child can only have one Cash Junior ISA.	Yes, you can switch to another Investment Junior ISA or Cash Junior ISA. Keep in mind the child can only have one Investment Junior ISA. Exit fees may apply.

FAQs

Below you'll find answers to some questions about this investment option.

No. Your child's return on both Cash Junior ISAs and Investment Junior ISAs are tax-free.

For Investment Junior ISAs, the funds in the plan grow free of income tax and capital gains tax (excluding tax on dividends from UK shares).

You won’t pay tax on any interest earned on Cash Junior ISAs, either.

Just keep in mind that, tax treatment depends on individual circumstances and tax laws may change in the future.

It depends on whether you want to save or invest.

Cash Junior ISAs are similar to bank accounts, where interest is added tax-free – which means stable growth.

Investment Junior ISAs, on the other hand, are linked to a range of assets, including the stock market, which can provide higher growth potential over the long term.

However, the value can also go down as well as up, and the original investment is not guaranteed, meaning the child could get back less than you've invested.

Ready to start investing for your child's future?

We're right by you every step of the way.

When you open a Junior ISA with us, we'll even kick-start your child's investment by paying some money in. You’re committing to being in it for the long haul to give your little one a great start. So, it’s our way of rewarding your commitment and giving something back too.

However, if you cut loose by either switching out to another provider or the child makes a withdrawal within the first 5 years, we will need to deduct £50 back.

Keep in mind that stock market investments can go down as well as up, so your child could get back less than you've paid in. Terms and conditions apply.

Explore our Junior ISAs