As parents, we all want what’s best for our children, especially on the financial side of things. But giving your child the best future possible can require a lot of planning.
So where should you start? Well, paying into a Junior ISA could be a great way to get the ball rolling.
With a Junior ISA (sometimes called a JISA for short), you can save or invest for your child in a tax-friendly way. And the good thing about it is that you can transfer your child’s account elsewhere if you’re not satisfied with your current Junior ISA provider.
If this is something you’ve been thinking about, take a look through this in-depth guide to Junior ISA transfers for answers that any parent or guardian may commonly ask.
- What exactly is a Junior ISA transfer?
- Why would you transfer to a Junior ISA?
- Rules for transferring
- How to find the best Junior ISA for your child
- How to transfer a Junior ISA
What is a Junior ISA transfer?
In practice, a Junior ISA transfer basically just means moving any money in your child’s existing Junior ISA over to a new provider. While this happens, the transfer preserves the tax-efficient status of the account (effectively keeping your child’s remaining tax-free allowance for the remainder of the tax year).
Although your child can only ever have one Junior Cash ISA and one Junior Stocks and Shares ISA open at the same time, you’re allowed to transfer those accounts to another provider.
Junior ISA transfers can happen between:
- Two Junior Cash ISAs.
- Two Junior Stocks and Shares ISAs.
- A Junior Cash ISA to a Junior Stocks and Shares ISA.
- And vice versa: a transfer from a Junior Stocks and Shares ISA to a Junior Cash ISA.
- You can also transfer a Child Trust Fund over to a Junior ISA (more on that below).
Why transfer to a Junior ISA?
There are many reasons why you might consider transferring a Junior ISA to another provider.
If you’re unhappy with the service you’re getting from your current provider, whether it’s their customer service, or perhaps because you’ve found better interest rates elsewhere — transferring your child’s Junior Cash ISA could be a wise thing to do.
And similarly, if you think you’re paying too much in investment and management fees, you could look for another Junior Stocks and Shares provider. Or a blend of both types.
Here are some other reasons to consider transferring:
- More competitive interest rates for their savings.
- Better potential returns on their investments.
- More choice with how the money is invested (ethical investing, for example).
- Cheaper or more transparent fees.
- Looking for a provider that facilitates grandparents/other loved ones to contribute.
Read through a full list of Junior ISA benefits and considerations.
Also, if you’re managing a Junior Cash ISA for your child and are tired of low interest rates, it could be worth transferring it (or part of it) to a Junior Stocks and Shares ISA instead.
This is especially worth thinking about if you’re interested in seeing how much investing could offer your child, instead of saving in the traditional sense.
(With investing, your child’s capital is at risk and they could get back less than what you put in.)
Why invest for your child, instead of save?
With a Junior Cash ISA, your child is guaranteed to earn interest, making it a relatively safe option to build wealth over time. However, this is only half of the picture!
Particularly when inflation is added into the mix. Over the years, prices of goods and services tend to increase. And every time your child’s interest rate falls below the rate of inflation, their savings will lose purchasing power.
This means they may not be able to afford as much as they once could when the time comes to take their money out. So, it may be wise to consider other options to try and boost their finances.
With a Junior Stocks and Shares ISA, there’s no fixed interest rate. Instead, returns are dependent on how much the investments are worth when they’re sold. So, while it’s important to understand your child could get back less money than what’s put in, on the other hand, they could also enjoy inflation-beating returns!
Many studies show that over the long term, the likelihood of making a gain increases. In fact, the longer your child remains invested, the better chance they have to make a profit.
So, if time is on your side and you’re comfortable taking some risk, then it could be worth transferring some of your Junior Cash ISA to a Junior Stocks and Shares ISA.
If you’d like to see how our Investment Plans have performed over the years, follow this link:
Can I transfer a CTF to a Junior ISA?
Yes! If you’re already managing a Child Trust Fund (CTF) for your little one, and are feeling dissatisfied with its returns or would simply prefer to move to a new provider, this account can also be transferred to a more modern Junior ISA.
Child Trust Funds are no longer available to open, as Junior ISAs were introduced to replace them. And for that reason, children can only have either a Child Trust Fund or a Junior ISA open at the same time (not both!). Any CTF transfer to a Junior ISA done these days would effectively move the money over to a Junior ISA of your choosing and close the CTF account behind them.
Can you transfer your ISA to your children?
Both adults and children in the UK are entitled to an ISA allowance each year. However, it’s a tax benefit for an individual, and not something you can pass on to other people. So, put simply, no — you can’t transfer your ISA to your child.
You could, however, start saving or investing for your child using their own child ISA allowance of £9,000 (which is per tax year and could be subject to change in the future).
Junior ISAs are available to help you with this. And if you’re already saving or investing for your child as part of your own £20,000 allowance, it might be worth exploring this option.
Wealthify specifically offers a Junior Stocks and Shares ISA to help you invest in your little one’s future, if you’re interested in finding out more.
Junior ISA transfer rules
When it comes to transferring a Junior ISA, there are some rules you'll need to be aware of:
- Only the registered parent or legal guardian for the account will be able to transfer the child’s Junior ISA. Make sure all the details on the transfer form match your Junior ISA account.
- Transfers can happen between providers, or between types of Junior ISA (one of each type is allowed).
- You can't hold a Junior ISA and a Child Trust Fund at the same time.
- You'll need to complete and sign a transfer request form to start the Junior ISA transfer (otherwise your Child ISA will lose its tax-efficient status).
- Transfers between the same type of Junior ISA (Cash/Stocks and Shares) should always be done in full.
- Any money deposited during the current tax year also needs to be transferred in full.
- Money from previous tax years will work differently — if you’re transferring a Junior Cash ISA to a Junior Stocks and Shares ISAs, or vice versa, you can choose to transfer the balance in full or in part (previous tax years in part, current tax year in full).
- For a Junior Stocks and Shares ISA transfer, your child’s investments need to be sold, so they can be converted into cash and moved over (this means if the value of your investments were down during the sale, you could find yourself with less money than you initially put in.)
- Some providers will charge a penalty for transferring out before a certain date, so make sure you check the transfer policy of your current provider.
- Some providers will take a fee for transferring Junior ISAs in — something worth keeping in mind when shopping for a new provider (Wealthify doesn’t charge a fee like this.)
Fees and charges aside, there’s no limit to how frequently you can transfer a Junior ISA before the child turns 18. All you need to do is make sure you use the official transfer form and check that your child only has one of each type of account.
Will Junior ISA transfers affect your child’s allowance?
When you transfer a Junior ISA to another provider, you’re typically carrying money built up in previous years to a new account, and this won’t have any impact on your child’s ISA allowance for the current tax year.
For instance, say you opened a Junior ISA in May 2023 and managed to save £6,000 in total during that tax year (2023/24).
If you transfer the account and haven’t used any of the Junior ISA allowance for the current tax year yet (since April 6th), you’ll still be able to contribute up to £9,000 in your child’s account after the transfer is completed before next April 5th.
However, if you’ve saved £3,000 in the current tax year (2024/25), you’ll only be able to put up to £6,000 in the Junior ISA (because £9,000 allowance - £3,000 saved = £6,000.)
How to find the best Junior ISA for your child
When it comes to finding the best Junior ISA, it’s important to know what you want from it.
Do you want to provide your child with inflation-beating returns? Or are you looking to build up an emergency fund for them?
The way you answer these questions will help you decide which Junior ISA provider is best, and also which type to go for. For instance, if you want to provide your child with emergency savings, then a Junior Cash ISA may be a good option. Alternatively, if your aim is to give your child’s money a chance to grow over the long term, then a Junior Stocks and Shares ISA could help.
Here are a few things to consider when shopping around:
- Why do you want to open a Junior ISA?
- How old is your child? (Investing is usually done over a longer time frame.)
- How much can you afford to put aside?
- What are the interest rates provided, and are they fixed?
- Are you comfortable with taking some risk to build your child’s nest egg?
- How much are you willing to pay in fees? How simple is it to set up a Junior ISA with that provider?
- What do other customers think of them?
- How good is their customer care team?
- Are there any offers you could take advantage of?
When looking for a Junior ISA, make sure you do your research and know what you’re looking for. After all, you’re the only one who knows what the ‘best Junior ISA’ for your needs looks like.
How to choose a Junior Stocks and Shares ISA provider
If you’ve decided that investing is the route you’d like to take and you’re planning on going for a new Junior Stocks and Shares ISA, it’s important to try and find a provider that suits you and your child.
A good place to start would be to look at the fees taken by each provider. This is not always well understood, but fees and hidden charges can eat into your child’s profits, so keeping these low and transparent gives you more control.
Junior ISAs aren’t built equally, and before you make your decision, you’ll need to ask yourself how you want your child’s money to be invested.
Some services will let you pick your child’s investments and manage their plan. Whilst these DIY platforms put you in the driver’s seat, you’ll need at least some basic knowledge about investing and financial markets. And obviously, doing it all on your own can be time-consuming.
Other investment services, like Wealthify’s platform, will do the hard work for you. Our in-house experts will build your child’s Junior ISA and manage their portfolio on an ongoing basis — that way you can spend more time with your little one and less time researching potential investments.
How to transfer a Junior ISA
Transferring a Junior ISA is easier than you may think! Once you’ve found a new provider, let them know you want to transfer a Junior ISA in. There may be a form incorporated into their website, or you might need to contact them directly over the phone or by email.
The important thing here is the Junior ISA transfer form. You’ll need to complete this form before you move your child’s money, otherwise the Junior ISA will lose its tax-efficient status. If everything is filled out correctly, then your new provider will organise everything and move your money over for you.
How long does a Junior ISA transfer take?
Generally speaking:
- Transferring a Junior Cash ISA to a new provider typically takes up to 15 days.
- If you’re transferring a Junior Stocks and Shares ISA, you could expect the transfer to take a bit longer (the selling of existing investments takes some time).
- Child Trust Funds are usually transferred in 30 days.
Make sure to keep an eye on the transfer though and give your old provider a nudge if they’re taking too long to move the money out.
Once the transfer is completed, you may want to check everything is in the new account. And if it all went as it should, then you can relax and let your child’s money work hard for them.
For more information, please visit our Junior ISA transfers page.
Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future results.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.
