What Is A Junior Isa?

By Author: Mary Porter
Total Articles: 823
Comment this article

A junior ISA is a new type of savings account for children and has been developed for children who do not have a child trust fund. A junior ISA is an individual savings account and provides parents with a tax free way to save for their children’s future. Having a junior ISA allows parents to save up to £3,600 in each tax year. The money paid in and the gains are all tax free but the child cannot access the money until they are eighteen. A junior ISA is a long term savings option and has been designed to offer an alternative to people who don’t have a child trust fund in place but want to start saving for their children.
To qualify for a junior ISA the child must be under eighteen, live in the UK and not already have a child trust fund account. Each child is entitled to one cash junior ISA and one stock and shares junior ISA at any one time. All the money paid into a junior ISA belongs to the child. At eighteen the child can then decide what they won’t to do with the money that has been saved in their junior ISA over the years. Many children will use them to buy their first ...
... car or to help towards university fees. If the money stays in the junior ISA once a child is eighteen it will automatically be changed into an ISA account.
Financial advisers are the people to see for help and advice on choosing a junior ISA and they will also offer advice on pension release options. Many people want to realise money form their pension before they officially retire. Once you are over 55 you can access tax free cash and or income from your pensions without having to retire and this is known as pension release. Pension release may be needed for many different reasons and typically people require the money for clearing debts, home improvements, buy to let properties, helping children out and other various reasons. Pension release is a much cheaper option than taking out a loan if you need finance.