There are many subreddits on Reddit focusing on personal finance in the UK. We took a look at some questions we’ve found around Junior ISAs and have shared our answers in this article.
Question: What happens to a Junior ISA when a child turns 18?
At 18, the Junior ISA automatically matures into an ISA and the child becomes responsible for the account. They can then decide what to do with the money, whether for example to keep it invested, or withdraw some or all of it.
The account maturation process will vary depending on the provider. We’ve written an article about how Beanstalk manages the process.
Question: What happens if there are two junior ISAs for the same child?
ISA rules state that a child is allowed to have a cash JISA and a stocks & shares JISA at the same time, however they can not have two of the same type i.e. two stocks & shares Junior ISAs at once.
If for some reason you’ve found yourself in a situation where your child does have two JISAs of the same type, the newest Junior ISA will be void. Providers send information annually to HMRC on who has Junior ISAs so this will be picked up by the HMRC during their audit process. You should contact the provider of the newest Junior ISA to notify them of the other Junior ISA; they will be able to advise what to do and maybe able to arrange a transfer in of the old Junior ISA.
Question: We moved abroad five years ago, can my now 18 year old access their Junior ISA?
If a child with a Junior ISA moves abroad, the JISA continues to operate and further subscriptions can be made into it even if the child is non-resident in the UK. Depending on the country, some providers may not support further subscriptions but you can always transfer the Junior ISA to a new provider.
When the child turns 18, the Junior ISA matures into an ISA pending the young adult completing the provider’s application process. However as non-residents are not allowed to open or contribute to ISAs except in specific circumstances, such as if they are crown employees, the provider will likely require the account to be closed and the funds withdrawn by the young adult.
Question: Can you transfer a Junior ISA to a Junior SiPP?
No, you are not able to transfer a Junior ISA to a Junior SiPP as they are different products with different rules. You’re only able to transfer a Junior ISA to another Junior ISA provider.
Question: Can anyone else pay into my daughters Junior ISA?
Yes they can, this is one of the benefits of a Junior ISA. How easy it is to do can vary depending on the provider you’re with though.
On Beanstalk we make it very easy for others to contribute directly to your child’s Junior ISA with our Invite and Gift Links tools.
Question: Are Junior ISAs worth it? If not maxing your personal ISA allowance.
It’s personal choice as to how you want to save for your children but Junior ISAs have some great benefits (other than the tax-free allowance) that ISAs don’t have that should be considered.
The savings are locked away until the child turns 18, this means that you can’t be tempted to dip into the money as you are not able to make withdrawals from the account. Many parents appreciate this and so do family and friends who contribute to the account.
This leads into the other benefit which is the ability for others to save directly for your child. On Beanstalk we have many grandparents and others that contribute towards a child’s savings through their own version of the app. ISAs don’t allow third party contributions.
Question: Can I set up a Junior ISA for my goddaughter?
Only the parent or legal guardian is allowed to open a Junior ISA for a child, so as a godparent you wouldn’t be able to. However family and friends are able to contribute directly to a child’s JISA once it is opened.
With Beanstalk, people other than the parent can register the child and start the account application process. The parent is then notified to complete the application. Once this is done, the donor is automatically linked and can start saving for the child. You can find out more details in this article.