Junior ISAs with Newcastle Building Society

From driving lessons to their first home, stowing away a nest egg for your little one is the perfect gift to help them later in life. With Newcastle Building Society, you can save for your child’s future in a safe, tax-efficient way.

Introduced in 2011, Junior ISAs (JISAS) are savings accounts available to any child not eligible for a Child Trust Fund. You can set up a Junior ISA on behalf of your child and they will have access to it once they turn 18. With a Junior ISA, all interest earned is tax-free. Meaning your money will grow just as quickly as your little one.

To be eligible for a Junior ISA, your child should:

• Be aged under 18
• Live in the UK

Junior ISAs at a glance

There are many reasons you may be considering a Junior ISA over other savings alternatives.

• Easy and inexpensive to open
• A safe, secure and tax-efficient way to save
• Anyone can make payments into a Junior ISA
• Your savings are locked until your child’s 18th birthday, so can’t be dipped into unnecessarily
• You can easily transfer your Junior ISA across from other Junior ISA providers

How do Junior ISAs work?

There are two types of Junior ISA:

• Cash ISA

A Junior Cash ISA is very similar to a standard savings account, however you don’t have to pay UK Income Tax on the interest the money earns.

• Stock and shares ISA

Junior investment ISAs have the potential to earn a high rate of returns, as the money is invested in the stock market. You also don’t have to pay UK Income Tax or Capital Gains Tax on any of the returns.

Your child can have one or both types of Junior ISA, however the money saved into both accounts will count towards the same Junior ISA allowance.

Anyone can make a payment into a Junior ISA, up to the yearly allowance. However, though money in the account belongs to your child, nether you or your child can withdraw from it until your child has turned 18.

Nonetheless, your little one can still manage their Junior ISA from the age of 16.

What is the Junior ISA allowance?

The Junior ISA allowance dictates that in the 2021/22 tax year, you can save or invest up to £9,000 in a Junior ISA.

This money can be split between the two different types of Junior ISA or just the one, depending on your personal preference. For example, you may want to stow half of the money in a stocks and shares ISA and half in a cash ISA. Both accounts count towards your single £9,000 Junior ISA allowance.

Once your child turns 18, the account will automatically convert into a normal adult ISA and, as such, your child will be able to benefit from the full annual allowance for adults, which is £20,000 for the 2021/2022 tax year.

How do I apply for a Junior ISA?

As a parent or legal guardian, you can open a Junior ISA on your child’s behalf. If you’re interested in opening a Junior ISA, you must be a resident in the UK and have parental responsibility for that child.

With Newcastle Building Society, you can set up a Junior ISA with an initial deposit of as little as £1. Simply get in touch with one of our friendly advisers today, or pop into your nearest branch.

Looking for something different?

Would you prefer a savings account with a little more flexibility? Our instant access Children’s Regular Saver accounts may be the option for you. We offer a range of savings routes for children and adults alike. You can check out all of our account types here.

A helping hand as your little one approaches adulthood

Putting money away for your child’s future.

Whatever you have in mind for your child, building a saving’s pot is the perfect gift. We understand that all parents want the best for their children, that’s why we’re invested in helping our customers at every stage of their savings journey.

More than just a savings account.

A Junior ISA isn’t just a safe, tax-efficient way of saving for your child’s future. With an ISA, your children can manage their account from the age of 16, giving them the chance to practice responsible saving habits during their formative teenage years.

For more information on Cash ISAs, refer to our comprehensive guide to Cash ISAs. For more information on setting up a Cash ISA with Newcastle Building Society, view our full range of products or contact us.