A Junior Investment Savings Account (otherwise known as a Junior ISA, or JISA) is a tax efficient way to invest money on your child’s behalf. The tax advantages and flexibility they provide make them a savvy option for parents who want to invest in their child’s future, as any returns from children’s ISA are tax-free, meaning they are free from Income Tax and Capital Gains Tax.
Money held in a Junior ISA is locked in until the child reaches 18, after which it automatically converts into an adult ISA. The newly 18 year old then has full access to the funds.
Although JISAs must be established by a parent or legal guardian, they can be used if a grandparent wants to give a lump sum to their grandchildren. Instead of giving cash gifts, using a Junior ISA is a smart way to put away money for the future. Gifting money in this way is also a great opportunity for those with estate planning needs who want to see their wealth passed on effectively to younger generations.
There are a few big-ticket items that a child needs when they reach 18. Funds for university, a new car, a year out travelling. Investing a little each month into a Junior ISA means that money will be there for them to access at a time when they might need it the most. Maximising the tax-free child ISA allowance will benefit them in later life when it comes to moving out and settling down.
Educating children on finance and getting them engaged in monitoring their savings can help them make better decisions later on. It will also help them see the value of long-term savings and investments.
Whether you are looking to open a Junior ISA for your children or transfer an existing Junior ISA or Child Trust Fund, we’re here to help and provide you with expert financial advice according to your situation. Contact our financial advisers in Derby today on 01332 497670, or email us at firstname.lastname@example.org.
The value of an ISA with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.