As the emphasis on intergenerational wealth planning intensifies, the popularity of the Junior ISA shows no sign of subsiding. The JISA star continues to rise, with almost 15% more plans subscribed to in 2017/18 than the previous year. Some of this growth can be attributed to the flexibility of the JISA to fit into financial plans, where the aim is to pass wealth down the generations.
A JISA can be set up by the individual with parental responsibility for a child under the age of 18. However, a great benefit is that anyone can pay into the child’s JISA, including parents, grandparents and godparents, within the child’s allowance of £4,368 in the 2019-20 tax year. Like any other ISA, if the subscription is not used up in a tax year, there is no opportunity to carry forward unused subscriptions. With income and gains from savings and investments exempt from Income Tax and Capital Gains Tax, it’s a win win. In normal circumstances, savings and investments held in a JISA cannot be accessed until the child reaches 18.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.