Friends & Family Junior ISA
Our new Junior ISA allows friends and family to easily gift money for a child’s future, via a secure webpage shared by the parents.
We have launched a pioneering new product to make saving for your child’s future simple, quick and flexible. You can now invest for your child’s future at the click of a button.
Available to UK resident children aged under 18 who don’t have a Child Trust Fund. Or you can transfer your Child Trust Fund into our Junior ISA.
Flexible
Our Friends & Family Junior ISA enables parents, grandparents, godparents and friends to easily pay into an account which could help the child build up valuable funds to use when they reach adulthood. It might help to pay towards university, a deposit on a flat, or even flying lessons.
Payments can be as little as £5 per month or £10 lump sum, up to £4,128 per year. And we can accept payments by debit card, direct debit, bank transfer and cheque.
Easy to manage
You can easily share requests with your family to help them pay into your child’s ISA easily and efficiently and they can even choose where they might want your child to spend the money when they reach 18.
Potential for growth
There’s also the possibility of an annual bonus being added to the account.
A tax free lump sum for your child
There’s no income tax or capital gains tax payable on the final amount.
Important Information about our Junior ISA
- It is important to remember that anything paid into a Junior ISA is a gift to the child and can’t be repaid. Junior ISAs can’t be accessed until the child reaches 18 and the child can choose how to spend the money when they withdraw it.
- Our Junior ISA is a stocks & shares ISA investing in our with profits fund. The investment performance of the ISA will depend on the performance of the with profits fund, expenses and other factors.
- Any bonus declared is applied to the account annually. Bonus rates are not guaranteed and past bonus rates cannot be used as a guide to future bonus rates.
- If you transfer the account to another provider before the child reaches 18 then a penalty may apply due to investment performance of the fund up until that date which may, in certain circumstances, result in your child getting back less than paid in. However, if your child withdraws from the account on their 18th birthday then they will receive back everything that has been paid in plus any bonuses added to the account.
- Tax treatment may change in the future and tax advantages depend on individual circumstances.
- As the cost of living increases, the final amount in the ISA might not buy as much in the future as it could now.
Please make sure you read the Key Features and Terms & Conditions booklet before applying. These contain essential information about the Junior ISA. Additionally there are questions & answers below that will give you extra information about the Junior ISA.
We are not able to offer advice and if you are unsure about whether this product is suitable for you, you should seek advice from an independent financial advisor who may charge for this.
Key features
- Parents, friends and family can save up to £4,128 in the current tax year
- Available to UK resident children under 18 (if the child has a Child Trust Fund they can only open a Junior ISA by transferring their Child Trust Fund into a Junior ISA)
- Affordable investments from as little as £5 per month or lump sum payments from £10
- Tax efficient
- Contributions to the Junior ISA are gifts to the child and cannot be accessed until age 18
- Flexibility to stop and start payments
- Potential for growth by possible addition of bonuses
- A penalty, known as a market value reduction, may be applied if the account is transferred to another provider before the child reaches age 18
- If the Junior ISA is not redeemed at age 18 then it will roll-over into an adult ISA and the terms & conditions of the adult ISA will then apply
FAQs
Junior ISAs are tax efficient accounts available to all children aged under 18 who are UK resident and who did not qualify for a Child Trust Fund, or who wish to transfer a Child Trust Fund into a Junior ISA. Junior ISAs have special tax advantages that mean that proceeds from the ISA will be completely tax free at maturity. This is subject to current legislation which may change in the future and tax advantages depend on individual circumstances.
Kingston Unity’s Friends & Family Junior ISA is a stocks & shares type Junior ISA that invests in our With Profits Fund.
The aim of the ISA is to provide growth by the possible addition of annual bonuses to the account.
The With Profits fund aims to smooth returns to avoid the worst of market fluctuations. It does this by investing in a mixture of asset classes.
Yes, there are cash and stocks & shares versions of the Junior ISA. Kingston Unity only offers a stocks & shares version.
Your child can hold both a cash Junior ISA and a stocks & shares Junior ISA, as long as the overall contributions in a year do not exceed the annual allowance.
Premiums are invested in our With Profits fund. This is made up of investments into four main asset classes; equities, property, fixed interest and cash. The purpose of this is to reduce investment risk whilst giving exposure to assets that over a period of time are expected to generate growth and provide a balanced approach with low to medium risk.
At the end of each calendar year we may declare a bonus rate depending on the performance of the With Profits fund. This is known as a reversionary, or declared, bonus.
This is announced in Spring and applied for the investment period 1st January (or account opening date if later) to 31st December of the previous year. Any bonus added will be based on this reversionary rate.
The rate declared is after annual charges have been taken into account. We do not take annual management charges directly from your account.
Bonus rates are dependent on the investment performance of the With Profits fund, our expenses and other factors such as the number of policyholders dying or cashing in their policies.
Bonus rates may be higher or lower than those declared in previous years and there is no guarantee a rate will be declared.
A penalty, called a market value reduction, could be applied to the Junior ISA if it is transferred to another provider before your child reaches age 18.
This could result in your child getting back less than has been paid in.
The purpose of the market value reduction (or MVR) is to make sure you receive your fair share of investment profits, and when investment conditions are adverse that people who cash in do not reduce the value of the fund for those who continue to invest.
The amount of MVR depends on when you invested, the period over which you invested, and the investment market conditions at the time. An MVR is not applied on death. The level of MVR will be set by the Society’s Board after receiving advice from the Society’s Actuary.
We will try to smooth returns payable to members through their Junior ISA.
This practice may alter at any time.
If your child’s Junior ISA remains in our With Profits fund until their 18th birthday and they withdraw all of the funds on their 18th birthday then we guarantee we will not apply a market value reduction penalty.
This means that they will get back all of the contributions that have been paid into the account plus any bonuses that might have been added to the account.
If the Junior ISA is not withdrawn on the child’s 18th birthday then it will roll-over into an adult ISA and will be subject to the Terms & Conditions of the adult ISA.
Any UK resident child aged under 18 can open a Junior ISA as long as they do not already have a Child Trust Fund. If the child is aged under 16 then someone with parental responsibility must open it on their behalf and be the registered contact.
If the child has a Child Trust Fund then this would need to be transferred into a Junior ISA (we can provide a transfer pack for this).
If the child already has a stocks & shares Junior ISA then this can be transferred into our stocks & shares Junior ISA (we can provide a transfer pack for this).
The most that can be paid into a Junior ISA is currently £4,128 each tax year. The tax year runs from 6th April to 5th April the following year.
Friends and family can all contribute into a child’s Junior ISA as long as the total invested is not greater than the allowance in that tax year.
A child cannot hold a Child Trust Fund and a Junior ISA.
If your child has a Child Trust Fund this can be transferred into a Junior ISA. We can provide a transfer pack for this. It is important that you compare the features of the Child Trust Fund they already have against the Junior ISA and decide whether it is right to transfer it to the Junior ISA.
For a child aged under 16, someone with parental responsibility must open a Junior ISA for that child.
Children aged 16 and 17 would need to open a Junior ISA for themselves.
When a child reaches the age of 16 they can choose to manage their Junior ISA themselves but if they choose not to do this then the person with parental responsibility will continue to manage the account.
The account is set up for the child and only the child can access the money when they reach the age of 18.
When the child reaches the age of 18, the child can access the funds in their Junior ISA. We will need to verify their identity at this point.
If they do not wish to withdraw the funds from their Junior ISA then they can choose to leave the funds in the Junior ISA and it will roll-over into an adult Investment ISA and the terms & conditions applicable to this ISA will then apply.
Unlike adult ISAs, each type of Junior ISA has to be kept with the same provider. Your child can have a stocks & shares Junior Isa with one provider and a cash Junior ISA with another provider but they cannot have more than one of each type.
Junior ISAs can be transferred between providers but if you are transferring a stocks & shares Junior ISA into our Junior ISA you would need to transfer the full amount.
Yes the Society presently takes into account an annual charge of 1.5% before bonus rates are calculated and declared. This will be reviewed every year based on the experience of the Society.
There is also the possibility of a market value reduction penalty being applied under certain circumstances.
Once we have processed your application, you will receive an email from us to the email address provided in your application. This will include login details to a secure webpage where you can customise your child’s account. You will also receive your child’s member documentation to the address provided in the application.
Your password and user details will be sent in separate emails. Please check your inbox and also your “spam” emails as occasionally emails may go into this folder. If you still have not received this, you can contact us via [email protected] or 01924 240164.
When you log into your child’s account, on the right of the screen you will see a share button. Click here to reveal a selection of default messages which you can move between by clicking on the tabs. Once you have found the message you would like to send click on the Copy to Clipboard button beneath.
Now open up your electronic messaging service (email, facebook etc ) and paste your message there. If you wish to personalise your message, you can do so before you send.
It is only the registered contact that is able to view the account details on line. When sharing a link with others, they only receive a screen in which they can make a payment, select how they might want their gift to be spent in the future and leave a message for the child to read as they get older. The only personal information they will receive within the message is your child’s first name.
We will also make them aware, via the payment screen, that payments are gifts to the child and cannot be returned.
The account can only be opened by an individual with parental responsibility for the child.