Time's on your side with a Junior ISA
As the school holidays are ending and we’re heading back to our usual routines, there is a no better time to start a savings habit.
With the return to school, many parents and guardians will be thinking about how they can help their children in the long term. With a Junior ISA (JISA), you can start small with monthly payroll contributions from as little as £10 a month and let them build over time, making your money work harder for you.
How can you act now and start saving for your child’s future?
JISAs are an effective way for many parents and guardians to put money aside for their child’s future. JISAs are long-term savings accounts that offer tax-free benefits.
How much can you save tax-free?
The savings limit for a Junior ISA is £9,000 for the 2022/23 tax year.
How does it work?
A child’s parent or guardians with parental responsibility must open the Junior ISA account on their behalf but anyone can pay money into the Junior ISA account once it has been opened. Once a child reaches 16, you can transfer ownership of the Junior ISA to them, but they’ll be unable to access the account until they’re 18.
What are the benefits of a JISA?
Once a JISA has been opened, anyone can pay money into it on behalf of the child. As a result, it’s an excellent way to futureproof a child’s savings. That means family and friends will never be lost for a birthday or Christmas present idea!
Here are a few things to know about the Junior ISA:
Money in a Junior ISA belongs to the child and can’t be withdrawn from the account until they’re 18 at which point it automatically converts into an ISA.
Your child can have 1 cash Junior ISA and 1 Investment (or stocks and shares) Junior ISA, as long as money saved into the two accounts within the tax year doesn’t exceed the £9,000 allowance. You can transfer a Child Trust Fund into a Junior ISA.
Many parents and guardians will be sorting out finances and tidying these up for children as they go back to school this month. Setting them up with a savings account is a great way to help your children build healthy savings habits that will support them in the future.
Watch our video to learn more about Junior ISAs:
Article by
Team NatWest Cushon
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