A Junior ISA the whole family can pay into
A Junior ISA could be an affordable way for family and friends to help a child prepare for adult life.
Anyone can put money into a Junior ISA. So whether you’re an aunt or uncle, godmother or grandparent, cousin or family friend, you can all contribute towards a youngster’s financial future.
A Junior ISA can only be set up by a parent or legal guardian, but once that’s done, anyone can contribute.
With a Scottish Friendly Junior ISA you can choose to put a small amount away every month from just £10 and to make things easy, we can set up a regular Direct Debit. If you’d prefer to pay in lump sums, any amount between £50 and £4,080 in the current tax year is allowed. So you’re not just limited to regular payments; you can also make a one off payment any time you’d like. This could be when the child receives birthday, Christmas or other gifts of money over the year. But remember that £4,080 is the maximum annual limit, so if you’re saving in a Cash Junior ISA with another Junior ISA manager too, that investment will count towards their limit. Remember stock market investments can go down as well as up so your child could get back less than you've paid in.
It’s important to remember that the Junior ISA belongs to the child and only they can withdraw the money. So all payments made into the investment plan are basically a gift to the child and cannot be returned. The child can manage the account from age 16 but won’t be able to take money out until on or after their 18th birthday.
Got a lot of family and friends?
Keeping track of how much each person has contributed to your child's future can be quite difficult especially if you have a big circle of friends and family.
Scottish Friendly’s Junior ISA is a little different from other child investments. Instead of one big pot of money for your child, separate policies can be set up within the Junior ISA. This means everyone making a contribution can have their own policy, and name it how they want, e.g. ‘Gift from Granny’, ‘Uncle Alan’s Uni Fund’ or ‘Mum and Dad’s Flat Deposit’. As long as everybody stays within the child’s annual allowance, you can have as many policies as you like.
Know the rules
Find out how you can put aside a total of £4,080 in Junior ISAs during the current 2016/2017 tax year.Find out more about the Junior ISA allowance for 2016/2017
Two types of Junior ISA
If you’re looking to start saving or investing for a child’s future, there are two different types of Junior ISA to choose from. Click on each to find out more: -
- A Stocks and Shares Junior ISA
- A Cash Junior ISA
The tax free element of a Cash Junior ISA means you don’t pay tax on interest earned. As for the Stocks and Shares version, it means your investment grows free of income and capital gains tax (other than tax on dividends from UK shares). In both cases, tax treatment depends on individual circumstances and tax law may change in the future. A Junior ISA should be considered a long-term investment.
Investing for a child can start from £10 a monthOpen a Junior ISA today>
No advice has been provided by Scottish Friendly in relation to this plan. If you are in any doubt as to whether this plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.