Junior ISA

For many Junior ISA Planholders turning 18 it will be the first time they have managed their savings and taken oversight of their Junior ISA. It is only natural that they, their parents or guardians and anyone currently paying into their Plan are probably wondering what happens next.

At age 18 the account will mature and automatically roll into an Adult ISA.

If the Junior ISA is held with us, we will be in touch before the Planholder turns 18 with further information about the options available.

In the meantime, we have put together this handy guide telling you everything you need to know about Junior ISAs.

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A Junior ISA with Foresters

We pride ourselves on looking after 1.5 million children’s savings Plans and when they reach their 18th birthday we hope that the money saved for them helps their journey into adulthood.

But we don’t want it to stop there, we want to be therefore the other milestones in their life; saving for their first home, their children and protecting the ones they love.

Our Purpose is to help people save, protect their families and give back to our members and the communities they live in, find out more about Foresters >

I would like to know more about my Junior ISA

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 this tax year.

The money saved by yourself, family members and friends over the years can help give you the best start to adult life.

Looking for more information? Visit our Junior ISA FAQs >

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 18^th 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 1^st September 2002 and 2^nd 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 18^th birthday?

Four weeks before your 18^th 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 options

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.

Staying safe online with your money

We take the security of your personal details and financial information very seriously. No matter how sophisticated our controls are, we can’t do it alone.

Avoid sharing your Plan details, or your MyPlans account via messages, images and/or videos online, including social media. This information can be viewed by the public, which could include criminals who will take advantage of your data. Here are some tips to keep safe online and help prevent fraud >

What parents need to know about their child's 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.

If you're looking for more information about Junior ISAs, please visit our Junior ISA FAQs.

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 >

Keeping your child's money safe online

We take the security of yours and your child's personal details and financial information very seriously. No matter how sophisticated our controls are, we can’t do it alone.

Ensure your child avoids sharing their Plan details, or their MyPlans account via messages, images and/or videos online, including social media. This information can be viewed by the public, which could include criminals who will take advantage of your data. Here are some tips to keep safe online and help prevent fraud >

Junior ISA