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Junior ISA

What is the Junior ISA?

The Junior ISA is a version of the long-standing and popular ISA but aimed at parents, guardians and grandparents who wish to save for a child's future. There are subtle differences, one being the annual contribution limit of £3,600. However, the ISA advantages of no capital gains tax and no further liability to income tax are the same.

Unsure where to invest?

Our research team has produced 3 Junior Easy ISA portfolios to help you maximise returns - please click here to view these portfolios. Alternatively, you can choose from any of our 1,600 funds. You may also be interested to know that every fund in our Viewpoint magazine is available at 0% initial charge.

Access to the Junior ISA will be at age 18 giving the opportunity for years of potential stock market growth. The tables below show the possible Junior ISA value that could be accumulated, based on the level of contribution and potential annual rate of return over 18 years.

Monthly Saving (assumes growth of 7% p.a.)

Monthly Contribution
£50
£100
£200
£300
Junior ISA Value
£21,661
£43,323
£86,646
£129,970

Maximum lump sum invested p.a. (assumes growth of 7% p.a. and 3% inflationary increase to contribution)

Junior ISA Value
£161,543

Why should you use the Junior ISA allowance?

Act now to protect your child’s future. The Junior ISA could be used for university costs, house deposits, a wedding or possibly a car. Alternatively, at age 18, the Junior ISA will be automatically rolled into an 'adult ISA' and remain invested.

How do I invest?

If the child is eligible, please familiarise yourself with the Terms & Conditions and Key Features on the Literature Library page of our website then complete the application form and return it to us. Please make your cheque payable to Cofunds Ltd or complete the direct debit mandate if saving monthly.

 

Key points

Lump Sum Investments

  • Minimum lump sum is £500 (£50 thereafter)
  • Paper based only. Our Chelsea Junior ISA cannot be bought online or over the phone at this stage.
  • Valuations can be viewed online through our secure website www.chelseafs.co.uk

Monthly Savings Plan

  • The minimum for monthly savings is just £25.

Who is eligible?

  • Children born on, or after, 3rd January 2011.
  • Children (aged under 18) born before 1st September 2002.
  • Currently only available to children who don't have a Child Trust Fund (this will hopefully change).

What is the allowance?

  • £3,600 per child per tax year (allowance expected to rise in line with inflation from 2013).

Remember....

  • Can only have one Stocks and Shares provider for the whole life of the Junior ISA.
  • Contribution can be split how you wish, e.g. maximum £3,600 could be invested £500 into Cash and £3,100 into Stocks and Shares.
  • You can transfer between providers, but only in full.
  • Can transfer from Cash to Stocks and Shares and back again (unlike 'adult ISAs')
  • Account held in child's name.
  • Must be opened by parent or guardian but anyone can make a contribution.
  • No withdrawals permitted until age 18.
  • Cannot currently transfer Child Trust Funds to Junior ISAs (this will hopefully change - see below).

E-petition

Chelsea's Managing Director, Darius McDermott, has recently spoken out in support of an e-petition urging the government to allow CTFs to be merged into Junior ISAs:

"The government seems in no rush to allow Child Trust Funds (CTFs) to be merged into a Junior ISA and we think this is a mistake. Children with CTFs will be completely disadvantaged as, while the investment limit has been increased, the choice of investments available is vastly inferior compared with those available through a Junior ISA. We will be working with our peers in the industry to urge the government to address this as soon as possible. 

"A group of parents have launched an e-petition (http://epetitions.direct.gov.uk/petitions/7468), asking the Treasury to allow CTFs to be merged with the Junior ISA. We fully support this notion and a link to the petition is above, should you wish to add your name."

Darius McDermott, Managing Director.

Case study of a Junior ISA investor

Chelsea customers, Daniel Hawkes and his wife Abigail, are going to invest the full Junior ISA allowance for their daughter Sienna.

The couple were featured as a case study in the Mail on Sunday in October, talking to Personal Finance Editor, Jeff Prestridge. You can read more about their plans and also read comment from our Managing Director, Darius McDermott, by clicking on this link: http://www.dailymail.co.uk/money/saving/article-2049562/Junior-Individual-Savings-Accounts-How-build-120-000-baby.html