Ryan Hudson’s daughter was just four weeks old when the graphic designer and his partner, Kerry, decided to do something that would set her up for the future.
The couple, who live in Northampton, opened a Junior Isa (Jisa) – a tax-free savings and investment account for those under 18 – for Harper Rose, who is now five months old. “It was something that I always was set on doing,” says Hudson, 39. “Everything is so uncertain, and this is something I wish, in some ways, that my parents had done for me. We know how hard it is to get on the housing ladder, and one of us has been to uni, so we wanted to give Harper Rose some help in reaching any of those goals – but maybe she’ll decide she wants to buy a car or take a gap year.”
With a Jisa, Harper Rose’s parents can keep her money completely separate, rather than trying to keep track of it in their own savings pot. “Only she can get hold of it,” says Hudson, who runs graphic design agency Ministry of Design. “I didn’t want there to be a time in the future when we might want money and be tempted to break into the piggy bank.”
Introduced by the government in November 2011 as a tax-efficient way for parents and guardians to save for a child’s future, Jisas have grown in popularity over the years, with 907,000 opened in 2017/18, up from 794,000 the year before. A maximum of £4,260 (£4,368 from 6 April 2019) can be paid into a cash Jisa, a stocks and shares Jisa, or any combination of the two per child during a tax year. It can only be accessed once the child turns 18, at which point it becomes an adult Isa.
“It’s a good way of investing in your child’s future, and you can start as soon as they are born,” says Adrian Lowcock, head of personal investing at Willis Owen. “Some do this to help their child have some money to start adult life, whether that’s for higher education or to buy a car or a deposit for a house. It can also be a great way to teach your child about the benefits of savings and investments. If you start teaching them when they’re seven or eight, and talk to them about how it’s performing, then by the time they’re 18 they might think responsibly about how to use it.”
One of the benefits of the Jisa is its flexibility. “You can either put in small sums or lump amounts, depending on what’s available,” says Lowcock. “You might decide you want to put money in a Jisa as a Christmas present.”
Setting up the Jisa was easy, says Hudson: “I started researching them and then just applied online. It was straightforward.” It’s worth noting that if a child already has a child trust fund they won’t be eligible for the Jisa, but you can transfer the money across.
Lowcock says that while only a parent or legal guardian can open a Jisa, anyone can contribute.
Hudson and his partner opened the Isa with £100, and now top it up with between £30 and £50 a month, but they’re also encouraging their family to get involved. “Without wishing to sound like Scrooge, we started to suggest to family they might want to make a deposit, instead of buying Harper Rose a Christmas present. She has loads of stuff she will grow out of or can’t appreciate at her age. We just say: ‘Here are the bank details – it’s an option should you want to help her when she’s older.’”
