Investing in your child’s future is one of the most rewarding things a person can do. However, curating an investment plan like this can be difficult.
One of the best ways to offer financial security to your children once they reach adulthood is by investing in a Junior Stocks and Shares ISA. A Junior Investment ISA is a tax-efficient investment account specifically designed for children under 18.
In the article below, we will outline the top Junior Stocks and Shares ISAs available, focusing on their features, benefits, potential returns, as well as dive into how they actually work.
Best Junior Stocks and Shares ISAs - Our Recommendation
Best Junior S&S ISAs Reviewed & Compared
Best Overall: Hargreaves Lansdown
Best Reputation and Customer Service: AJ Bell
Widest Array of Options: Interactive investor
Most Focused ISAs: Vanguard Investor
Best Educational Content: Fidelity
1. Hargreaves Lansdown – Best Overall
JISA Account Fee | 0 - 0.45% |
|---|---|
Dealing Fee | None |
Minimum S&S JISA Investment | £100 lump sum or£25 per month |
When it comes to setting up a Junior ISA for your child, Hargreaves Lansdown offers a user-friendly and convenient solution. Not only is the account easy to set up and manage, but the platform also provides a wide range of investment options.
With this platform, you'll have access to an extensive selection of more than 3,000 funds.
One notable aspect of Hargreaves Lansdown is its commitment to providing informative guides for Junior ISA account holders. These guides offer valuable insights on various topics, including how to maximize your child's investments and avoid common mistakes.
They delve into the tax benefits associated with investing in a Junior ISA and provide recommendations on investment choices, covering shares, funds, and asset allocation.
Furthermore, if your child already has a Child Trust Fund, Hargreaves Lansdown makes it simple to transfer the funds to a Junior ISA, consolidating your child's investments into a single account.
- Excellent educational content on JISAs
- Super low charges
- Easy to set up
- No cash Junior ISAs
2. AJ Bell – Best Reputation and Customer Service
JISA Account Fee | 0.25% per year (maximum of £2.50 per month) |
|---|---|
Dealing Fee | £1.50 per investment |
Minimum S&S JISA Investment | £25 per month |
When it comes to opening a Junior ISA account, AJ Bell proves to be a reliable and cost-effective option for investors who are comfortable with managing their own investments.
Navigating their traditional website is relatively easy, although it could benefit from improved signposting for newcomers.
One notable feature of AJ Bell is its range of investment options. They offer a wide selection, including individual shares and funds, allowing investors to build a diversified portfolio tailored to their preferences.
The website also provides useful tools such as a slider that visualizes platform fees and helps investors compare costs. While the user experience could be smoother compared to other investment platforms in the UK, the platform's trading features are straightforward, and navigation is clear.
Furthermore, AJ Bell offers investment ideas from their specialists, ensuring that investors have guidance when needed. Additionally, their customer support team is easily accessible through phone, email, or web chat, with a reputation for being friendly, transparent, and straightforward.
- Excellent reputation
- Great customer service
- Additional data tracking options on platform
- Signup is slightly more difficult compared to others on this list
| Name | Score | Visit | Support | Mobile | Security | Commission | Disclaimer | |
|---|---|---|---|---|---|---|---|---|
 | 7.9 | Visitajbell.co.uk | Phone, Live Chat, Email | Android, iOS | 2FA, Biometrics |
3. Interactive Investor – Widest Array of Options
JISA Account Fee | £4.99 to £19.99 per month, depending on plan |
|---|---|
Dealing Fee | £3.99 to £5.99 per trade, depending on plan |
Minimum S&S JISA Investment | £25 per month |
Interactive Investor offers a visually appealing website with a recent rebranding that made it more vibrant and colourful. However, it's important to note that the platform still contains a fair amount of financial jargon. Furthermore, the portfolio display page, while functional, lacks the informative and engaging elements found on other platforms.
ii has different pricing plans, which are listed below:
The Essentials plan at £4.99 per month,
The Investor plan at £9.99
The Super Investor at £19.99,
To open a Junior ISA account with this platform, new customers need to first open an ISA or Trading Account under the Investor or Super Investor plans. Junior ISAs are not available under the Investor Essentials Plan.
With this platform, you gain access to a comprehensive range of investment options, including shares, funds, bonds, investment trusts, and ETFs. It also provides tools such as Quick-start Funds—a collection of low-cost funds curated by experts.
- Wide range of investment options
- Simple and to the point
- Need a subscription plan
4. Vanguard Investor – Most Focused ISAs
JISA Account Fee | 0.15% per year |
|---|---|
Dealing Fee | None |
Minimum S&S JISA Investment | £500 lump sum or£100 per month |
Vanguard Investor is a trusted and straightforward platform for opening a Junior ISA account, specializing in low-cost, no-frills investing. With over 45 years of experience and more than 30 million satisfied customers worldwide, the platform offers a safe and reliable option for most investors.
One of the standout features is its LifeStrategy funds, which provide ready-made investment solutions. These funds offer five different flavours, allowing investors to choose the one that best suits their needs and investment goals. With its low-cost structure and minimal maintenance requirements, LifeStrategy funds offer fair value and simplicity.
Furthermore, the platform takes pride in its low fees, ensuring that investors can keep more of their returns. The account fee is just 0.15%, enabling you to maximize your investment growth potential.
- Most focused ISAs
- Lowest fees
- Lowest number of options
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 6.0 | Visitinvestor.vanguard.com |
5. Fidelity – Best Educational Content
JISA Account Fee | None |
|---|---|
Dealing Fee | £7.50 for online deals;£30.00 for phone deals |
Minimum S&S JISA Investment | £100 lump sum or£25 per month |
Fidelity is a reliable and solid choice for individuals seeking ISAs and pensions, particularly for mainstream investors who value strong support and comprehensive research.
It caters to a wide range of investors but particularly shines for individuals seeking a blend of shares and funds, as opposed to dedicated share traders. Additionally, Fidelity's pricing is fair and competitive.
As a trusted global player, the platform has recently enhanced its website with major improvements including enhanced share dealing services and performance reporting and enhancing the overall user experience.
A noteworthy advantage is that it offers completely free Junior ISAs, allowing parents to open accounts for their children without incurring any charges.
Fidelity also offers expert guidance and insights from their teams of experts. Their online tools and resources assist investors in making informed decisions about where to allocate their funds.
With its secure online service and user-friendly apps, investors have the convenience of managing their investments 24/7, ensuring access to their portfolio anytime.
However, we need to mention that some online reviewers have complained of slower account verification and opening.
- Best guidance on JISA
- Excellent educational content
- Slow to open account
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 7.5 | Visitfidelity.com |
Compare Junior Stocks and Shares ISAs
The below table represents fees relevant for Junior stocks and shares ISAs, but can overlap with fees for other services. The percentages for account fees refer to the total value of the fund.
Provider | Account Fee | Dealing Fee | Minimum Investment |
|---|---|---|---|
AJ Bell | 0.25% per year | £1.50 per investment | £25 per month |
Hargreaves Lansdown | 0 - 0.45% | None | £100 lump sum or£25 per month |
Interactive Investor | £4.99 to £19.99 per month, depending on plan | £3.99 to £5.99 per trade, depending on plan | £25 per month |
Vanguard Investor | 0.15% per year | None | £500 lump sum or£100 per month |
Fidelity | None | £7.50 for online deals;£30.00 for phone deals | £100 lump sum or£25 per month |
How to Choose the Best Junior S&S ISA Provider?
There are a host of JISA providers online. However, when looking for the best online platform, there are certain things you need to consider. Below are the most important factors to keep in mind:
Reputation and regulation - The first question that may arise is - can you trust this platform with your money? In the UK, look for platforms that are regulated by the FCA and are covered by the FSCS. Furthermore, check their online reviews and try to get a sense of the platform’s reputation in general.
Fees and charges - All investment and financial platforms charge fees and have additional associated costs. However, some charge fewer fees as compared to others. While this shouldn't be your main factor in choosing a platform, it is one point you should consider.
Range of assets and ISAs - Explore the platform you are interested in and see if they actually have the financial products you might be interested in.
Customer service - Besides being covered by the FSCS, a UK government scheme that can protect your funds in case a platform fails, you should also seek protection in terms of customer service. A trusted customer support service can resolve ambiguities and help you maximize results.
What Is a Junior Stocks and Shares ISA?
An ISA, or Individual Savings Account, is a popular savings and investment product available to residents of the United Kingdom. Similar to Pension Funds, ISAs are a tax-efficient way to save or invest money, allowing individuals to earn interest or investment returns without paying income tax or capital gains tax on the profits.
A subtype of ISAs is JISAs (Junior Individual Savings Accounts). These are essentially the same thing, but designed as a kind of nest egg, or a children’s savings account.
There are several types of JISAs, including both cash ISAs, as well as ISAs that deal with shares and stocks. The article here will focus on the latter.
How Does a Junior ISA Work?
In general, a Junior ISA is pretty simple. Once opened at a financial institution or platform, you are allowed to deposit funds within the account. Both cash and stock/share accounts will grow over time, accumulating interest.
Furthermore, stock and shares ISAs, junior or otherwise, follow the growth of the value of their shares and stock.
You won't have access to the funds until the child reaches 18 years of age. However, the child can start managing their account from the age of 16, providing input on investments and management, but cannot withdraw money.
Many conflate Junior ISAs with Junior SIPPs (self-invested personal pension), but the main difference is that the latter locks the child's funds until they reach 55.
Can I save for more than one child in a single junior ISA?
Can my child have two junior ISAs?
Advantages and disadvantages of junior ISAs
- Tax-free gains and investment - There are no taxes on this investment; therefore, letting your gains compound and grow unobstructed.
- Boost your child’s future - Setting up your child with an ISA will give them a great start for adulthood, letting them focus on their passions and on their career with less financial stress and worry.
- Cash JISAs give you great interest rates - Compared to other savings accounts, the interest rates provided by cash JISAs are typically higher than normal savings accounts.
- Stock and Share JISAs are a great long-term investment - Investing in a good set of stocks and shares can provide your child with excellent returns later on, potentially higher than a cash JISA.
- The money is locked - You won't be able to touch these funds until the child turns 18, even in case of facing any financial issues or liquidity. However, you can pause your deposits.
- Cash JISAs might not be able to fight inflation - If the growing inflation rate becomes higher than your interest rate, you might actually see lower returns as time goes by.
- Stock and Share investments are subject to market volatility - As with any type of investment in stocks and shares, market volatility and changes in the sectors whose shares you have invested in, might actually diminish the value of the fund as time goes by.
Junior ISA Rules
There are several limitations and rules you need to follow when it comes to Junior ISAs. You need to consider:
Eligibility - Junior ISAs are available for children who are under the age of 18 and are residents of the UK. The child must not have a Child Trust Fund (CTF) account, as they cannot hold both simultaneously.
Limits - There is an annual contribution limit set by the government, which may change every tax year. For the current tax year (2023/2024), the limit is £9,000. This limit applies to the total contributions made across all Junior ISAs held by the child.
Tax-free growth - Any interest earned on cash held within a Junior Cash ISA and any investment returns generated within a Junior Stocks and Shares ISA are tax-free. This allows the savings or investments to grow more efficiently.
Withdrawal date - Funds within a Junior ISA are locked until the child reaches the age of 18. At that point, the Junior ISA automatically converts into an adult ISA, and the child gains full control over the account. They can choose to withdraw the money or continue saving/investing within the adult ISA.
Note that unless the child has been diagnosed with a terminal illness or if a child passes away, parents cannot withdraw from a junior ISA.
Who Can Set up a Junior ISA?
Only parents or a guardian with parental responsibility can open a Junior ISA for under 16s.
The following individuals can open and contribute to a Junior ISA on behalf of a child:
Parents - Parents (including adoptive parents) have the right to open and contribute to a Junior ISA for their child.
Legal guardians - Legal guardians appointed by the court can open and contribute to a Junior ISA for the child under their guardianship.
Family members and friends - Other family members, such as grandparents, aunts, uncles, and even friends, can also contribute to a child's Junior ISA. They can make one-off or regular contributions to help boost their savings or investments.
Please note that there is a difference between contribution to a JISA, and opening one.
It's worth noticing that there are no restrictions on who can contribute to a Junior ISA as long as they are willing to do so, but only a guardian or parents can open one.
However, the total contributions made by all parties must not exceed the annual contribution limit set by the government, which is currently £9,000 for the tax year 2023/2024.
Only if the grandparent has “parental responsibility”, i.e. is a legal guardian. They can contribute whenever they want.
Does the government contribute to junior ISAs?
Who can withdraw funds from junior stocks and shares ISA?
Alternatives to Junior ISAs
Child Trust Fund
Child Trust Funds were launched in 2005, and have been discontinued and replaced by the Junior ISA system in 2011. However, if you opened one before 2011, you still have access to the CTF.
Both have the same yearly allowance of £9,000 for the current tax year of 2023/2024. The core difference is that the JISA was deemed much more straightforward in comparison with CTFs. Furthermore, JISAs automatically change to ISAs once the child reaches 18, while CTFs automatically deposit their balance in the child’s account.
How to transfer a child trust fund to junior stocks and shares ISA?
The process is rather simple. First, you need to open a Junior ISA of your choice (cash or otherwise) at the institution of your choice. You will then provide said institution with details of the CTF and any information the institution might request, as well as filling out a transfer form.
Note that your child can't hold both a CTF and a JISA. Also, only the guardian that registered the CTF can perform the transfer.
Junior Cash ISAs
The core difference is rather simple and straightforward, in terms of structure. Junior Cash ISAs are just that - pure cash you deposit for your child, which grows and develops through interest.
Stock and Share Junior ISAs, however, work by having your money invested into a set combination of shares and stock, whose value grows according to the growth potential of said stocks.
Stock and Share ISAs can be directed by your provider, or they can be Self Select Stock and Share ISAs, where you get to choose some, or all, of the investment products.
How to transfer junior cash ISA to stocks and shares?
The process is relatively easy, with some differences between the two types, depending on the direction.
Transferring from cash to a stocks and shares ISA includes the following:
First, only the registered contact can initiate the transfer
You can transfer the funds in full or partially
Transfer from cash to stocks and shares includes choosing the right “package” at the financial institutions you are interested in
Fill out the transfer form provided by the institution
Some providers might charge a fee or a penalty, something you should discuss with the provider before the transfer
The process is the same for share and stock ISA to cash transfer, with the added step of having your investments be sold and converted to cash.
Are Junior Stocks and Shares ISA Worth It?
While we have noted some disadvantages and pointed out potential risks with these types of accounts, they are still considered viable and smart investments for your child’s future.
The final decision always falls down to the guardian and it's up to you to consider the risks. However, putting money aside in some sort of fund or savings account is always a better choice than locking the money in a safe or “in a mattress”.
