Investing for Your Children: A Junior Stocks & Shares ISA

Junior ISAs are a flexible, simple and tax-efficient way for you to save for a child’s future. Investments in a Junior ISA can only be accessed by the child when they reach the age of 18.

Please see our glossary for information on the financial terms used in this webpage.

What is a Junior ISA

Junior ISAs are a flexible way to save for a child. Just like an ISA, they can hold equities*, bonds** and cash. However, remember that the savings in a Junior ISA are locked in until the child turns 18.

Junior ISAs are available to UK resident children who do not have a Child Trust Fund (CTF) account. However, parents and guardians now also have the choice to transfer a child’s existing CTF into a Junior ISA.

Should you already have a CTF account or want to invest more than the Junior ISA limit, there are alternative routes to access the long-term growth potential through The M&G OEIC or The M&G Savings Plan.

A Junior ISA must be opened by someone with parental responsibility or legal guardianship for the child. This person will be the ‘Registered Contact’ for the account.

* Shares of ownership in a company.

** A loan, usually taken out by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the loan is repaid.

How do Junior ISAs work?

The Registered Contact will have responsibility for the investment
You can invest up to £9,000 in a Junior ISA each tax year.
You can invest by regular monthly payments or a lump sum at any time
Anyone can gift or contribute money (including the child)
You can switch from a cash Junior ISA to a stocks and shares Junior ISA and back again (please note that M&G only offers a stocks and shares Junior ISA)
When the child turns 16 they can choose to take control of their Junior ISA account
The money can only be accessed by the child when they turn 18

Who is eligible?

Children living in the UK who do not have a CTF account
The account must be opened by a parent or legal guardian
Children living in the UK who have an existing CTF account and wish to transfer to a Junior ISA

The M&G Junior ISA

A Junior ISA is a long-term investment that your child could hold for up to 18 years, so it makes sense to choose an expert in the field. At M&G, we have nearly 100 years of investment experience and the size and the scale of resource to give your child a head start with their money.

We believe that Junior ISAs could have a key role in every parent or guardian’s long-term financial plan for their children.

Please note that M&G only offers a stocks and shares Junior ISA.

Why choose The M&G Junior ISA?

Invest from as little as £10 per month
Pay no entry charge and no exit charges (an ongoing charge will apply)
Choose from our extensive range of expertly managed funds

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and investors may not get back the original amount invested.

Is a Junior ISA subject to tax?

Any returns generated are free from personal income and capital gains tax
The annual Junior ISA allowance of the Registered Contact or any Third-Party Contributors is not affected
You don’t have to declare a Junior ISA on your personal tax return

ISA and JISA tax rules may change in the future. ISA and JISA tax advantages depend on your individual circumstances.

How do Junior ISAs and ISAs compare

Junior ISA	ISA
Investment limit: £9,000	Investment limit: £20,000
You can hold one cash and one stocks and shares Junior ISA at a time, with the maximum £9,000 split between them to suit you.	You can invest up to £20,000 in a stocks and shares ISA, a cash ISA, an Innovative Finance ISA, a Lifetime ISA† or a combination.
Once invested in either a stocks and shares Junior ISA or a cash Junior ISA, with an investment provider, each annual allowance must be invested with this same provider unless the Junior ISA as a whole is transferred elsewhere. You can’t invest each annual allowance with different providers unless a formal transfer of the investment has taken place.	Each year, you can choose to invest your annual ISA allowances with different providers. You can also transfer ISAs between providers at any point, without affecting your allowance for the current tax year. However, some providers may charge for this service. Whilst your investment is being transferred it will be out of the market for a short period of time and will not lose or gain in value.
You can switch from cash to stocks and shares and back again for greater flexibility.	You can transfer from a cash ISA into a stocks and shares ISA and vice versa as often as you like.
Anyone can contribute into the Junior ISA as long as the total of all contributions does not exceed the annual limit. However, contributions can’t be returned and will belong to the child (the account holder).	You must make subscriptions with your own money.
At 16, a child can open their own Junior ISA.	N/A
Contributions are not accessible until the child turns 18, when the account automatically becomes an ISA.	Contributions can be accessed at any time.

† Since April 2017, 18-40 year olds have been able to open a Lifetime ISA and pay in up to £4,000 each tax year. They will be able to continue making contributions up to the age of 50. The government will add a 25% bonus to all contributions to a Lifetime ISA within the limits. However, it is important to note that the Lifetime ISA will count towards your annual ISA allowance.

Share classes and charges

We like to keep our charges simple. For private (non-advised) investors only Sterling Class A Shares are available when you invest.

Available share types

Most funds offer the choice of two share types - income or accumulation.

Income shares entitle the holder to be paid the income attributed to those shares on the payment date. This is usually paid twice a year but can be paid annually, quarterly or monthly depending on the fund.

Accumulation shares don’t pay income. Instead, they automatically reinvest any income accruing to the fund and this is reflected in the share price. If a fund only offers Income shares, any net income can be reinvested to buy more shares.

If you currently hold income shares, the only option is to reinvest your income to purchase further shares of the same fund, and you can continue to do so. However please note that where income from underlying investments is saved up within the fund throughout the accounting period and reinvested to buy more shares on the reinvestment date, the income is not exposed to any market movements (up or down), unlike accumulation shares which reinvest income automatically once received.

Charges

We don’t apply entry or exit charges to investments in M&G funds Sterling Class shares. However, there is an ongoing charge which will vary per fund. The ongoing charge is made up of the Annual Charge which may be discounted depending on the size of the fund, and extraordinary expenses.

Learn more about share classes on our Share Classes page, or by downloading our Important Information for Investors document where you can find information about the specific share classes available in your choice of fund(s).

Investment limits (per fund)

Investment minimums (per fund)
Minimum lump sum	£500
Minimum monthly amount	£10
Minimum additional lump sum	£100
Minimum additional monthly amount	£10

Target Market Information

This document explains who we believe the product is, and is not, suitable for. This is based on M&G’s opinion and doesn’t take into account your individual circumstances.

Funds available

You can invest in any of our funds in the Fund Centre.

Invest now

For information on making an investment with M&G, please visit our Invest with M&G page.

We don’t give financial advice, so you should speak to a financial adviser if you need help deciding if an investment is right for you.

Transfer your Junior ISA or CTF to M&G

You can transfer your existing Junior ISAs or CTF with other providers to M&G.

Please note, M&G will not charge you to process your transfer when we receive an instruction, however your current provider may apply a charge when you transfer your investment. Whilst your investment is being transferred it will be out of the market for a short period of time and will not lose or gain in value.

For more information on transferring to M&G, please visit our ISA Transfer page.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. The views expressed on this page should not be taken as a recommendation, advice or forecast. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. Past performance is not a guide to future performance.