Junior ISAs Explained

Junior ISAs are basically the same as general cash ISAs, but with a lower annual contribution limit.

13:41 21 March 2013

If you plan to open a child trust fund, be reminded that this has already been replaced with Junior ISAs as of November 2011. These are tax-free savings account for children under the age of 18.

These accounts are basically the same as regular cash ISAs. They are investment and saving wrappers, which protect your children’s cash from both capital gains tax and income tax.

It is worth noting that if your children already have existing child trust fund, they are no longer eligible for Junior ISAs.

Just like regular cash and shares & stocks ISAs, Junior ISA also has annual contribution limit which is £3,600. This limit is updated annually. Anybody is allowed to contribute to a child’s Junior ISA account. These include parents, siblings, or even organisations. 

When your child turns 18 years old, he will be given full access to his account. The Junior ISA will then be converted to regular ISA. This means that the allowance will increase.

Currently the limit is £5,640 for cash Isa and £11,280 for stocks and shares Isa.