Junior ISA Allowance for the 2024/25 Tax Year
The current financial year starts on 6th April 2024, and with it comes a renewed Junior ISA allowance for your little one. This may have raised questions about your child’s allowance and how it works; so we’ve broken down all you’ll need to know about their Junior ISA allowance in the 2024/25 financial year.
What is a Junior ISA allowance?
A Junior ISA allowance is the total amount you can save or invest tax-efficiently into your child’s Junior ISA each financial year. This means you won’t pay any income tax or capital gains tax on any returns or interest. Your Junior ISA allowance, along with any additional investments, has the potential to change each year, which is why it’s important to keep up to date with the current year’s allowance.
What is the annual allowance for a Junior ISA in 2024/25?
The current Junior ISA annual allowance for the 2024/25 financial year is £9,000. This amount is reviewed and set by the government each year, so could potentially change in the future.
Your child’s annual allowance can be invested in a single Junior ISA such as a stocks and shares Junior ISA, or spread across other types of Junior ISAs such as a cash Junior ISA.
If you’re looking to save or invest for yourself rather than a child, then you can invest into an adult Stocks and Shares ISA, which has a different annual allowance of £20,000. To learn more visit our guide on the Stocks and Shares ISA allowance.
When does the Junior ISA allowance get renewed?
The Junior ISA allowance is renewed every year on 6th April. This allowance doesn’t roll over, so if you haven’t used all of your allowance in one financial year, then any unused allowance won’t be able to be used in the future. The allowance is renewed each year by the government. However, it has remained unchanged since 2020 when it was increased from £4,368 to £9,000.
How can you use the Junior ISA allowance?
You can use your child’s Junior ISA allowance by investing into a stocks and shares Junior ISA, or saving into a cash Junior ISA. Alternatively, you can also choose to put money into both types of Junior ISA in the same tax year, as long as you do not exceed the overall allowance.
E.g. you can invest £6,000 in a stocks and shares Junior ISA and £3,000 in a cash Junior ISA tax-efficiently.
Are there any Junior ISA rules I should know?
Yes, when opening a Junior ISA it’s important to remember that there are a few rules you need to follow.
- Your child must be aged under 18 and a UK resident.
- You are able to save or invest tax-efficiently up to the annual allowance of £9,000.
- Any unused allowance can’t be rolled over to the next financial year.
- Only a parent or guardian can open a Junior ISA for their child, but anyone such as a family or friends can contribute towards their annual allowance.
- Your child won’t be able to access these funds until they turn 18 years old.
- Your child will have the option to manage their Junior ISA themselves once they turn 16 years old.
- You can invest in one cash Junior ISA and one stocks and shares Junior ISA each financial year as long as you don’t exceed your child’s overall annual allowance.
Be sure to read through our Important Information Guides for all the key information about our Junior ISA. Remember that when you invest, your capital is at risk.
More information about junior stocks and shares ISAs
Important things to consider
- Past performance cannot be taken as a guarantee of future returns.
- The value of the JISA depends on the future performance of the investments held in the fund and the bonuses we distribute from any profits arising from these investments.
- HM Revenue and Customs may change the tax status of a Junior ISA in the future.
- Inflation may affect the purchasing value of the investment in the future.
- The money invested into a Junior ISA cannot be withdrawn early; it can only be withdrawn by the child when they reach the age of 18 years old.
- If you transfer the plan to another provider, or if you leave the money invested for more than three months after the child’s 18th birthday, then we will calculate the value of the investments that you hold within the With–Profits Fund to ensure that you leave with your fair share. If you have been invested through periods of poor investment performance, you may get back less than the current value of your plan. This is known as a Market Value Reduction (MVR).
When you take out an investment product with us your capital is at risk and you may get back less than you have put in. All references to taxation are to UK taxation and are based on Shepherds Friendly Society’s understanding of current legislation and H M Revenue and Customs practice which may change in the future. Investment growth is by means of bonuses, the amount of which cannot be guaranteed throughout the term of the contract. Please ensure that you read the full terms and conditions of this plan which are available from your financial adviser or by contacting us directly.
Please note: No advice has been given by Shepherds Friendly, and if you are in any doubt as to whether an investment plan is suited to your needs, then you should contact a financial adviser. There may be a charge for financial advice, and the cost should be confirmed to you before any advice is given.