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Junior ISAs

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The Junior ISA will be launched tomorrow, 1st November. Parents of eligible children will be able to open and manage the Junior ISA which will be held in the child’s name. Children who were eligible for a Child Trust Fund – those born between Sept 2002 and 3rd Jan 2011 – will not be eligible for a Junior ISA.

The contribution limit will be £3600 pa but the contributions can be made by anyone. The contributions may be divided between cash and stocks and shares if the parents open both types of ISA: transfers may be made between the two. The nature of the underlying investment will depend on risk tolerance and on the age of the child. The child may take over the management of the ISA at 16.

No withdrawals are permitted until the child attains 18 when the ISA matures into a full, adult ISA and, of course, the child will have full access to the funds in the account.

Parents will choose this method of saving where they are content for the child to have access to all the funds at 18: if they prefer to restrict access, they may choose alternative means of setting funds aside for their children!

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