What is a Junior ISA?
A Junior Individual Savings Account (ISA) is a tax-efficient way for parents/guardians and others to save on behalf of a child. A Junior ISA can be opened for a child from registration of birth up to age 18, a child from age 16 can also open their own Junior ISA.
The Government limits the amount that you, family and friends can contribute each tax year. This is currently £9,000 for the tax year 2020/21.
The money saved by yourself, family members and friends over the years can help give you the best start to adult life.
What happens when I reach age 18?
When you reach age 18 your Junior ISA will automatically roll into an Adult ISA.
If you would like to add further contributions, add a Lifetime ISA element or make an encashment you are able to do this online or with a Financial Adviser. You may also make an encashment over the telephone.
Before your 18th birthday we will write to you with more information about your Junior ISA.
Find out more about my options
What is an ISA?
An Individual Savings Account (ISA) is a tax-efficient way to save for the future.
You can save in an Adult ISA with Foresters from as little as £20. Our ISA is the only one on the market that gives you the choice to combine both a Stocks and Shares ISA and a Lifetime ISA in one plan.
A Stocks and Shares ISA is a tax-efficient savings account which allows you to save up to £20,000 this tax year. Whether this is saving for the future, a rainy day or something more exciting, our Stocks and Shares ISA could be a great way for you to build up a lump sum.
A Lifetime ISA is available to anyone aged between 18 and 39, and was introduced by the Government to help first-time buyers get on the property ladder and/or to build additional savings for later on in life. The Government offers a 25% bonus added to all amounts invested into the Lifetime element, up to the maximum £4,000 per year, meaning the Government will contribute up to £1,000 each year. However there is a government penalty if you encash a Lifetime ISA before the age of 60 when it is not for purchasing your first home. This amounts to 25% of the value of the Lifetime ISA and could mean that you get back less than you have invested.
I have heard about a Child Trust Fund, do I have one?
You may have heard about a Child Trust Fund from friends, or you have received your National Insurance Number from HMRC stating:
“Child Trust Funds
When you turn 16, take control of your Child Trust Fund. Ask your parents or guardian, for more information go to www.gov.uk/child-trust-funds”
If you were born between the 1st September 2002 and 2nd January 2011 you may have been eligible for a Child Trust Fund. In 2015 the Government allowed Child Trust Funds to be transferred to a Junior ISA. Therefore if you now have a Junior ISA your parents/guardians decided to make that transfer.
You can only have a Junior ISA or a Child Trust Fund, not both.
What are my options?
Once your Junior ISA has rolled into an adult ISA, you can decide on any of the following:
• Simply leave your savings where they are
• Add contributions – Contribute to your ISA from as little as £20
• Open a Lifetime ISA – Save for your first home or later life and gain a yearly bonus of up to £1,000
• Make an encashment – as you have access to your savings, you can make an encashment
Find out more about my options
Add contributions and continue to save with us
You can decide whether you would like to continue saving towards your future. At age 18 any further contributions will be into our ISA.
You can save into our ISA from as little as £20 up to your overall allowance of £20,000 each tax year.
By adding further contributions, you will be investing in a Forester Life ISA.
What is a Lifetime ISA?
A Lifetime ISA is a tax-efficient savings account available for UK residents aged 18 – 39. Introduced by the Government in 2017, the Lifetime ISA is beneficial if you’re looking to save towards a first home or build up a savings pot for later on in life, with a generous 25% Government bonus on every contribution you make.
Our Forester Life ISA also gives you the option to have a Stocks and Shares ISA and Lifetime ISA under one Plan. You can reinvest some of your money into a Lifetime ISA.
The overall annual allowance for an ISA is £20,000, of which £4,000 can be saved into a Lifetime ISA each tax year. If you have both elements, this can be split £10 into each. You also have the opportunity to move money at any time from your Stocks and Shares ISA element into your Lifetime ISA element. The Stocks and Shares and Lifetime elements invest into the same fund.
Each tax year you can save up to £4,000 in your Lifetime ISA, any money from your Adult ISA transferred to the Lifetime ISA element will count towards that tax year’s £4,000 allowance.
Make an encashment
At age 18 you will have access to your savings and can make an encashment if you wish.
You can choose to make a full or partial encashment.
By making a full encashment your Plan with us will close. We have a duty to ensure that we pay only you as the Planholder, so you will need to have a bank account in your name for us to make the payment.
Any money encashed will be free from UK income and capital gains taxes.
What happens if I live abroad?
You will be able to leave the money in your Adult ISA; however, the only difference is that you cannot contribute into the Plan or add a Lifetime ISA element unless you become a UK resident again.
If you are a non-UK resident when you encash your plan, you should be aware that the amount you receive may be subject to taxation by the tax authority of the territory in which you live.
What happens before my 18th birthday?
Four weeks before your 18th birthday we will send you a letter telling you your Junior ISA is with us and that the account will roll into an adult ISA.
Find out more about my Junior ISA at 18
When you reach age 18, the person looking after your Junior ISA will receive a final statement which includes your Plan details and value.
Initially, you do not need to do anything. Your Junior ISA will automatically roll into an adult ISA.
You can get further help and information from us in the way that suits you best, whether that’s online, over the telephone or through face-to-face advice and use any of these methods to help make your decision.
I would like to know more about Foresters Financial
Foresters Financial is an international financial services organisation helping more than 3 million customers and members in the UK, Canada and the US, achieve their long-term financial goals.
We are more than a financial services provider; for over 145 years we have helped families build financial security and help each other make a difference in their communities.
We are driven to share, not shareholder driven.
Tax treatment depends on individual circumstances and may be subject to change in the future. As with all stock market investments the value may fall as well as rise, and you may get back less than has been paid in. A Lifetime ISA must be held for at least 12 months before using it towards the purchase of a first home. By saving into a Lifetime ISA instead of a workplace pension, you could lose the benefit of employer contributions and the value could affect any entitlement to means tested benefits. If you make an encashment before age 60, other than to purchase a first home, you will pay a government penalty of 25% on the encashment amount, and you may get back less than you paid in.