Our experience with Beanstalk is that many grandparents really want to help their grandchildren financially by putting money away for them for when they are older. The Junior ISA was created by the government specifically to help parents, grandparents and other family / friends save for a child’s future, so we wanted to answer some of the most common questions grandparents have about Junior ISAs (JISAs).
Can grandparents contribute to a Junior ISA?
Absolutely. HMRC rules for Junior ISAs allow anyone to make a contribution, including grandparents. Not all providers make this straightforward to do but Beanstalk’s family invite tool makes the process for grandparents to contribute to a Junior ISA very easy.
Can grandparents open a Junior ISA?
Unfortunately not, only the parent or legal guardian can open a Junior ISA for a child. However, Beanstalk uniquely allows grandparents to register the child, commit a contribution and then send a link to the parent, so that they can complete the opening of the JISA.
Can grandparents contribute to a Junior ISA if they live abroad?
Yes. You can make contributions to a grandchild’s Junior ISA even if you live outside the UK but your bank may charge or apply exchange rates for sending pounds if you are sending money from a bank account outside the UK.
How much can grandparents contribute to a Junior ISA?
Junior ISAs have a maximum annual contribution limit which is currently £9,000 per year. This applies to all contributions whatever the source, so as a grandparent you need to ensure that your contributions combined with any others that are made are less than this amount.
Can grandparents withdraw contributions made to a Junior ISA?
Money in a Junior ISA is held in the child’s name and is locked away until the child turns 18. Once a contribution is made, it belongs to the child and cannot be withdrawn by either the contributor or the parent.
Can grandparents decide how the money is invested or saved?
Under HMRC rules, the registered contact (the parent or legal guardian who sets up the account) is responsible for managing the account on behalf of the child until they become 18. A grandparent cannot therefore decide on how the money is invested although some parents using Beanstalk tell us that they will discuss the investment choice with the grandparent.
Can grandparent’s contributions to a Junior ISA be part of their Annual Gift Allowance?
Money gifted to a grandchild through a Junior ISA can be considered as part of the annual gift allowance, as long as the grandparent is UK-based. Grandparents can therefore potentially reduce inheritance tax liability by gifting within this allowance. For more information on inheritance tax and gift allowances, you should consult with an IFA or another similarly qualified advisor.
Can grandparents see how the Junior ISA is performing?
This depends on the Junior ISA provider but Beanstalk has a unique “full view” feature which allows the parent to give the grandparent access to all the same account information that the parent sees.