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What are the differences between junior ISAs and adult ISAs?

If you're weighing up how to start saving for your child, you could open a junior ISA (JISA) in their name or save for them in your adult ISA.

Find out how these two types of ISA compare so you can decide what's best for you and your child.

An overview of junior ISAs and adult ISAs

JISAs and adult ISAs are both tax-free savings products, which means no matter how much they grow by, there’s no tax to pay. However, they’re geared towards different people and suit different purposes.

The obvious difference is that junior ISAs are aimed at children while adult ISAs are made for adults, but since you can choose to use either or both products to save for your child, it’s important to recognise their other differences. From the age of 16, your child can have both a JISA and a cash adult ISA in their own name.

Junior ISAs Adult ISAs
Who is it meant for? Children under the age of 16 who don’t already have a Child Trust Fund. Anyone 16 years old or over can open a cash adult ISA. Anyone 18 years old or over can open a stocks and shares ISA.
Who can access the money and when? Only the child and only when they turn 18. The person who opened the adult ISA, at any time. Different withdrawal rules may apply between types of adult ISA.
When does it mature? When the child turns 18, their JISA becomes an adult ISA. It doesn’t. An adult ISA can be held indefinitely.

What are the similarities betwen junior ISAs and adult ISAs?

Even though they’re different products, JISAs and adult ISAs share a couple of key similarities.

They can both be held in cash or stocks and shares

One of the key similarities between JISAs and adult ISAs is that both can be held as either cash or stocks and shares.

In fact, you can even open a cash and a stocks and shares JISA for your child, just like you can with ISAs in your own name.

It’s worth keeping in mind that annual allowances will be split between products, so if your child has both a cash JISA and a stocks and shares JISA the £9,000 annual limit will be shared between both JISAs.

Cash junior ISAs and adult ISAs

Cash JISAs and cash adult ISAs grow in the same way, which is by accumulating interest, just like current accounts do. With a cash JISA or cash adult ISA, your money is protected as it’s not invested in the stock market, but it can lose some of its value over time if cost-of-living goes up.

Stocks and shares junior ISAs and adult ISAs

Stocks and shares products invest in the stock market. This means stocks and shares JISAs or stocks and shares adult ISAs have good potential to grow in the long-term, but the value of your investment could go down as well as up with changes in the stock market.

Both junior ISAs and adult ISAs are tax-free

Though they have different annual allowances, you won’t pay any tax on the returns on either a JISA or an adult ISA. This goes for both cash and stocks and shares.

What are the differences between junior ISAs and adult ISAs?

Despite their similarities, JISAs and adult ISAs are still different products and one could be more suited to your goals than the other.

How much you can save

JISAs have an annual allowance of £9,000, meaning this is how much you can put into a JISA each tax year. You can put up to £20,000 each tax year into adult ISAs. The tax year resets every 5 April.

How you withdraw from the account

You can’t withdraw any money from a JISA until it matures when the child turns 18. The only person who can withdraw the money is the child the JISA was opened for.

You can withdraw money at any time from an adult ISA.

How you manage the account

Only someone with parental responsibility can open a JISA for a child. This is typically a parent or legal guardian, who opens and manages the JISA until the child takes over, but they can't withdraw any money. The child can take over managing their account when they turn 16, and they can withdraw money at 18. At that point, the JISA matures and automatically becomes an adult ISA.

If you open an adult ISA, you’ll manage your own account from the time you open it. Unlike JISAs, adult ISAs don’t have a time limit and can stay open indefinitely.

Who can open the account

You can only open a JISA for a child 16 years old or younger (15 for a OneFamily Junior ISA) who doesn’t already have a Child Trust Fund. The money is locked in for your child until they turn 18, so there’s no risk of dipping into the savings and it gives you time to help your child learn about the importance of saving and money management.

A young person could open an adult ISA from the age of 16 for a cash product. Since you have to be a legal adult to invest in the stock market, you need to be at least 18 years old to open a stocks and shares product.

Some things to consider about junior ISAs and adult ISAs

When choosing between a JISA and an adult ISA, it all depends on who and what you’re saving for and how you want that money to be managed.

Your child can have both

When your child turns 16, they can open a cash adult ISA even if they already have a JISA in their name. So, until their JISA matures at 18, they can take full advantage of both annual allowances and save up to £29,000 a year.

They would have to open their own cash adult ISA, not stocks and shares, but they could transfer their cash ISA into a stocks and shares ISA when they turn 18.

You can't transfer your ISA to your child

However, you can withdraw money from your own ISA and put it in your child’s JISA. This could be a good way to save for a future child, as you can’t open a JISA for a child before they’re born.

What’s the best option for me and my family?

Ultimately, it’s up to you to decide what’s best for you and your family.

JISAs are geared to help you save for your child from birth up until they turn 18. You can save up for your child in your own adult ISA as well, and they can also open a cash adult ISA when they turn 16.

Because of this they can pair well, and you can have both at the same time. So, if your child has a JISA and their 16th birthday is coming up, make sure to talk to them about their options.

Junior ISA

Our OneFamily Junior ISA

With our stocks and shares Junior ISA you can start investing from just £10 per month up to a maximum of £9,000 each year on behalf of a child. Anyone can pay in, and the child will gain access to the account once they are 18 years old.

Explore our Junior ISA

Stocks and shares JISAs have good long-term growth potential, but the value of your investments can go up or down and your child could get back less money than you’ve put in.

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