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Our Junior ISA tips for International Children's Day

01/06/2018

Today is International Children’s Day. This may come as some surprise to those hard-pressed parents who feel like every day is children’s day, but it is a handy moment to review how you’re saving for your little dears.

Junior ISAs are most people’s savings vehicle of choice for their children. This makes sense. You can put in £4,260 per year, more than enough to keep them in squishies and slime for as long as they need it. Note, they only have access to the funds when they hit 16 so hopefully the slime and squishies phase will be over (though they may have worse habits by then). Any savings collected in a Junior ISA are free from income tax and capital gains tax and it is a useful way to build a tidy pot over the long-term.

Interest rates on cash Junior ISAs are generous. We would highlight these three as having consistently good rates:

The rates do change, however, so it is worth checking them every now and then on Savings Champion.

One thing to bear in mind when investing for children is that your time frame is usually long – 10-15 years. This means that you can afford to take a little risk because you have plenty of time to ride out any volatility associated with the stock market. As such, it may be worth considering a Stocks and Shares Junior ISA. These are the ones we like (just check the Junior ISA box on the left hand side menu).

Some of you may still have a Child Trust Fund (CTF). After some argy-bargy, you can now transfer a CTF into a Junior ISA. This needs to be done through a specific transfer, and in practice many Junior ISA providers now accept transfers. For those of you with a technical mindset, the rules are here.

We believe it is often worth doing. CTFs had a price cap, but it meant that investors generally weren’t getting very much for their money. Junior ISAs give you more investment choice and are generally better value; also anyone can contribute to them. You can’t hold both, so you have to commit to one or the other.

Our full guide is here and – we believe – worth a read. This is a long-term savings plan and worth getting right.

Read next: Junior ISAs: some key facts and tips

Related Questions

Got a Question?

  • I really don’t like this market meltdown during the coronavirus outbreak. Should I sell and just get out?

    | 19/03/2020 | 11

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    Holly Mackay's Response

  • I can't decide between getting a Junior ISA with a robo investor like Wealthify, or investing via Interactive Investor with an investment trust for my son's JISA. I want to invest ethically and am happy to research investment trusts myself. The fees seem similar and both have fund managers. What should I do?

    Rick | Sussex | 01/07/2019 | 2

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    Simon Bullock's Response

  • My son has a savings plan with Witan Jump that is now being closed and transferred to Hargreaves Lansdown. However, Hargreaves informs me that I cannot transfer all the money (£26,000) into a Junior ISA account, because it's more than the £20,000 yearly ISA allowance. I would like to keep the remaining money invested, but would appreciate some advice as to how I could invest it for my son.

    Isabella | Kent | 19/06/2019 | 0

    • Junior ISA
    Lesley James's Response

  • I have put the full allowance into my daughter's JISA. If for some reason I passed away, would the amount over £3000 per year be liable for inheritance tax?

    PB | Derby | 18/06/2019 | 2

    • Junior ISA
    • Inheritance
    Tommy Watson's Response

  • I'm in my late 30s, have a mortgage, a baby, no outstanding loans or credit cards, three pensions, and two Cash ISAs. I’d like to invest to renovate our house, help fund our children’s education and help them onto the property ladder, and retire as soon as possible! I considered a LISA but thought I might be better paying off more of the mortgage. I'm also confused about using a platform for a Stocks and Shares ISA. Any advice would be appreciated! Keep up the good work, I’m impressed with how refreshingly approachable your website is.

    Nick | Berkshire | 29/05/2019 | 3

    • Stocks and Shares ISA
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    Catherine Morgan's Response

  • I currently have a Stocks & Shares ISA and a Junior ISA with Wealthsimple. I am considering changing these to Vanguard, but I am unsure if transferring across providers is a simple process. Also can you only pay into one of each type of ISA per year?

    Philip | County Antrim | 21/05/2019 | 2

    • Stocks and Shares ISA
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    Tommy Watson's Response

  • I have a young boy who will be turning 4 this month. He is British. I want to save some money for this innocent boy, for when he comes of age, but I live in Uganda and I am not in touch with his mum. Can I open a Junior ISA for him?

    Dennis | Uganda | 11/04/2019 | 0

    • Junior ISA
    Zoë Dagless's Response

  • Our 16 year old son has inherited a significant sum. He wants to go to Drama School and pursue a career in acting, which we know means he is likely to be low paid/short of cash. I wondered how best to help him organise his savings/investments to help fund him through drama school/the early years, whilst trying to discourage him from simply dipping into his capital?

    Mo | West Sussex | 04/04/2019 | 4

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    Pete Matthew's Response

  • Where can I get a good Junior ISA?

    Rebeccah | Greater London | 27/03/2019 | 3

    • Junior ISA
    Holly Mackay's Response

  • I’m 36 years old, earn £85k, and have about £40k savings in the bank, mainly in an old ISA that I’ve done nothing with. I have a five year old daughter and would like to put my savings somewhere clever so they start to do something useful by the time she starts at an independent secondary school and fees go through the roof. Any bright ideas please?

    Milly | Berkshire | 22/02/2019 | 2

    • Stocks and Shares ISA
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    Catherine Morgan's Response

  • Hello Are there any specific pensions you would recommend, with low charges, which I can set up for my 11 yr old son? I am already paying the maximum into a Junior ISA. Anita

    Anita | West Sussex | 18/06/2018 | 3

    • Private Pension
    • Junior ISA
    Richard Allum's Response

  • Can I move an old Child Trust Fund?

    Suzanne | Greater London | 08/05/2018 | 0

    • Junior ISA
    Holly Mackay's Response

  • I would like to open a Junior shares ISA for my Grandson for about £50/month. How do I go about it and can you recommend some reliable companies?

    Roger | Surrey | 26/04/2018 | 2

    • Junior ISA
    • Shares
    Holly Mackay's Response

  • I am very lucky to have just received a gift which I want to invest for our retirement. My husband and I aim to retire in around five years. We have 11 more years of school fees to fund, then hopefully university fees for two after that. I've put together a plan for us - can you have a look and see if it makes sense?

    Fiona | UK | 18/01/2018 | 6

    • Private Pension
    • Stocks and Shares ISA
    • Junior ISA
    • Shares
    • Cash
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    Holly Mackay's Response

  • We have four grandchildren (2 English living in UK, and 2 Irish living in Eire). We have decided to start savings plans for their futures. Their ages are 18yrs, 11yrs, 8yrs and 4yrs respectively. My age is 75yrs, and my wife is a little older. What should we do, please?

    John | Buckinghamshire | 01/01/2018 | 1

    • Junior ISA
    • Lifetime ISA
    • Shares
    • Funds
    • Inheritance
    Martin's Response

  • I have a delightful 12 year old daughter and she has just opened her first bank account. I am dreadful with money but I would like to know what I should teach her so that she does not pick up my bad financial habits. Do you have some top tips of things to teach our children so they are wise and responsible with money please?

    Louise | Greater London | 11/09/2017 | 1

    • Junior ISA
    • Shares
    • Cash
    Lesley James's Response

  • Pensions vs ISA - which one is best?

    Roderick | Greater London | 06/09/2017 | 0

    • Stocks and Shares ISA
    • Junior ISA
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    Holly Mackay's Response

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