Junior ISA

What is going to happen to my child's Junior ISA when they turn 18?

The Junior ISA will automatically move to an Adult ISA. Your child can simply leave their savings where they are and if they wish to add further contributions or access the money, your child can do this at any time. Your child will be able to instruct us whether they would like to continue to save, or if they would like to make an encashment from the Plan - or as mentioned above they can do both. Before we accept any contributions into their ISA after age 18 we need their instruction.

We will write to your child four weeks before they reach 18 to tell them they have a Junior ISA with us. We will also send the Registered Contact a final statement on their 18^th birthday for their Junior ISA, showing the total value of the Plan.

We are not allowed to accept any further contributions into the Junior ISA once your child reaches age 18. If you have a MyPlans account, please note you will no longer be able to view their Plan online once they turn 18.

We know that some parents may have decided to keep this as a surprise for their child and have been saving over the years. Although this is a perfect gift, to help with university, towards a new car or even a new home, don’t let the surprise be spoilt by someone else – start talking to your child about their Junior ISA.

If your child’s Junior ISA was originally a Child Trust Fund, when HMRC provide your child with their National Insurance Number in the letter it will state:

“Child Trust Fund
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”

So your child may come to you with some questions about whether they have one, and then ask why they do not have one.

As more children start to receive their National Insurance Number letter, or see news and information available online about Child Trust Funds this could also ruin the surprise and even maybe cause a little confusion.

What are my child's options at age 18?

Four weeks before your child’s 18^th birthday we will send a letter telling your child their Junior ISA is with us and when their account will mature. We will also be providing a link to a dedicated webpage.

Visit the webpage

Once your child’s Junior ISA has rolled into an Adult ISA, they can decide on any of the following:

• Simply leave their savings where they are
• Add contributions – Contribute to an ISA from as little as £20
• Add a Lifetime ISA – Save for a first home or later life and gain a yearly bonus of up to £1,000
• Make an encashment – as your child has access to their savings, they can make an encashment

When your child reaches age 18, the Registered Contact will receive a final statement which includes the Junior ISA Plan details and value.

Adding contributions and continuing to save with us

Your child can decide whether they would like to continue saving towards their future. At age 18 any further contributions will be into our ISA.

They can save into our ISA from as little as £20 up to their overall allowance of £20,000 each tax year.

By adding further contributions, your child 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 your child is looking to save towards a first home or build up a savings pot for later on in life, with a generous 25% Government bonus for every contribution made.

Our Forester Life ISA also gives your child the option to have a Stocks and Shares ISA and Lifetime ISA under one Plan. Your child can reinvest some of their 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 your child has both elements, this can be split £10 into each. Your child also has the opportunity to move money at any time from their Stocks and Shares ISA element into their Lifetime ISA element. The Stocks and Shares and Lifetime elements invest into the same fund.

Each tax year they can save up to £4,000 in the Lifetime ISA, any money from your child’s Adult ISA transferred to the Lifetime ISA element will count towards that tax year’s £4,000 allowance

Make an encashment

At age 18 your child will have access to their savings and can make an encashment if they wish.

Your child can choose to make a partial or full encashment.

By making a full encashment, the Plan with us will close. We have a duty to ensure that we pay only to your child as the Planholder, so your child will need to have a bank account in their name so we can make the payment.

Any money encashed will be free from UK income and capital gains taxes.

What happens if we live abroad?

Your child will be able to leave in the money in their Adult ISA; however, the only difference is that they cannot contribute into the Plan or add a Lifetime ISA element unless they become a UK resident again.

If your child is a non-UK resident when they encash their plan, they should be aware that the amount they receive may be subject to taxation by the tax authority of the territory in which they live.

How does my child make their decision about their Junior ISA?

We will be providing your child with a link to a dedicated webpage about their options.

Visit the webpage

Your child can get further help and information from us in the way that suits them best, whether that’s online, over the telephone or through face-to-face advice and use any of these methods to help make their decision.

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 your child 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, your child could lose the benefit of employer contributions and the value could affect any entitlement to means tested benefits. If your child makes an encashment before age 60, other than to purchase a first home, they will pay a government penalty of 25% on the encashment amount, and your child may get back less than has been paid in.

I pay into the Junior ISA - Can I still contribute after age 18?

No, after the child turns 18 we will no longer be able to accept any gift payments from family and friends into the Junior ISA. Direct Debits into the Junior ISA also cannot be accepted after age 18, these Direct Debits will be cancelled.

The Junior ISA will roll into an Adult ISA, but before we can accept any contributions to the Plan the child will need to provide us with an instruction to do so. Once this has been done you and they will be able to make contributions into the new Adult ISA.

If you have a MyPlans account, please note you will no longer be able to view the Plan online once they turn 18.

Of course, you always have the option to take out an ISA or Savings & Investment Plan with us in your own name, whether to save for yourself, or on behalf of the child, or for you and a spouse if taking out a Savings & Investment Plan.

Did you know, you can contribute to a Junior ISA held with us online? Find out more >

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.