Are you a parent thinking of putting something away for a child? Here are 5 ways you could make the most out of Junior ISAs.
1. Start sooner rather than later
It’s an old adage and one that can definitely be applied to putting some money away for your child’s future:
The sooner you get started, the more time you will have for your investment to grow.
This means that if you are putting something away for a newborn, you could benefit from 18 years of your money being invested in the stock market. And with My Choice (Junior ISA) starting from £10 a month, it makes it an accessible way for most parents to get started. As with all stock market investments, the value of their Junior ISA can fall as well as rise depending on the performance of your investments. Tax treatment depends on individual circumstances which may change in the future.
2. Get your relatives to contribute
A useful feature of Junior ISAs is that anyone can contribute to the child’s fund (once the fund has been opened by the parent or guardian) as long as they remain within the child’s £4,080 Junior ISA allowance. So you could ask grandparents, aunties and uncles to contribute should you wish.
It could all add up – (Junior ISA) takes it a step further by allowing additional payees to name their additional policy or ‘pot’ of money – for example – ‘Granny’s Gift’, ‘Uncle Joe’s money’. You could even add additional policies yourself for specific goals for your child’s investment, e.g. ‘First car’ or ‘University fund’.
3. Think long term
With an investment, it’s all about the long term, and as mentioned above, with a young child you have time on your side. Unlike cash savings, an Investment with Scottish Friendly could allow you to harness the long term growth potential of the stock market. Please remember though, that unlike cash savings, the value of their Junior ISA can fall as well as rise depending on the performance of your investments.
4. Keep track of your investment
Sign up for a My Plans account and you can track your child’s investment performance through the years. It’s easy to manage your child’s Junior ISA policy from here – as well as any other ISA policies you have You could even set up a policy within your own ISA account for a child as long as you remain within your adult ISA allowance of £15,240, which would allow you full control over their funds, if indeed this is something that interests you.
