Investing for Children

Investing for Children and Grandchildren

Investing for children is something that most parents would like to do. With the recent launch of Junior ISAs it is now possible for parents, grandparents and family friends to invest in a child tax efficiently. Under current rules you can invest up to £3,840 pa per child - many providers allow you to invest from £50 per month.


If you are interested in finding out more about investing for children see below for the latest children's investment plan options:

Junior ISA Selection
ProviderJunior ISA ProviderRegular SavingsInvestment OptionsOnline ValuationsMore Info
Charles Stanley Stocks & Shares Junior ISAyesCharles Stanley Direct offers a Stocks and Shares Junior ISA with no initial charges or additional annual fees. Choose from a range of investments including shares, funds, gilts, bonds, investment trusts and ETFs. yesMore Info >
  • Save tax – shelter up to £4,080 per annum and pay no further on capital gains or on income from your investments.
  • Invest from £50 a month, or a lump sum from £500, or a mixture of both
  • Flexibility – choose from a wide range of investments to create a portfolio that suits you.
  • Transfer in Child Trust Funds or existing Junior ISAs
  • Automatic conversion to full ISA at age 18.
  • The value of investments and any income can fall, so the Junior ISA could return less than you invest
  • Returns on investment funds are not guaranteed
Scottish Friendly My Select Junior ISAyesA range of assets including UK and global shares, bonds and cashyesMore Info >
  • Invest up to £4080 pa per child
  • Invest from only £10 a month, or a lump sum from just £50, or a mixture of both
  • Raise, lower, or stop and restart your payments any time you like
  • Available for children under 16, who didn't qualify for a Child Trust Fund
  • Available for Junior cash ISA holders
  • The value of investments and any income can fall, so the Junior ISA could return less than you invest
  • Returns on investment funds are not guaranteed
One Family Junior ISAyesApply online and set up a direct debit of £20 or more and receive a £30 Amazon voucher. T&C’s apply, see OneFamily website. The OneFamily Junior ISA helps you to invest for your child’s future. It could help towards going to uni, driving lessons or perhaps helping to pay for a flat of their own. yesMore Info >
  • Award winning: Winner of the Moneyfacts Award for Best Junior ISA Provider (Awarded to Family Investments in 2014. OneFamily was established following a merger between Family Investments and Engage Mutual)
  • You choose how much you want to pay in, and when. From £10 to £340 a month up to £4,080 in the 2015/2016 tax year.
  • Available for children under 18
  • Open your child’s Junior ISA online and set up a Direct Debit and as a thank you OneFamily will send you up to £30 in vouchers (terms and conditions apply – please see OneFamily website).
  • Annual management charge 1.5% deducted directly from the fund's income.
  • Because it invests in stocks and shares, the Junior ISA's value can fall as well as rise, so your child could get back less than has been paid in.
Junior Stocks and Shares ISAyesFREE Children's ISA Guide. Choose from over 2,500 unit trusts and OEICs from leading fund managers. Invest from £25 per month or lump sums of £100.yesMore Info >
  • Same tax benefits as an adult ISA - no capital gains tax, and no further tax to pay on income.
  • Anyone can contribute - useful for birthday and Christmas gifts.
  • Withdrawals possible from age 18.
  • Open with a lump sum from £100 to £4,080 or start a monthly direct debit from just £25 per month.
  • Free mobile app to deal shares, access prices, indices, news and research.
  • The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 
  •  If you’re unsure about the suitability, we recommend you ask for independent advice.
  • Tax rules can change and the reliefs depend on your child's personal circumstances. 

There are various ways that parents can start investing for children, specifically:-

  • Junior ISAs
  • National Savings & Investments Children’s Bonus Bonds
  • National Savings & Investments Premium Bonds
  • National Savings & Investments Savings Certificates
  • Unit Trust and Investment Trust savings schemes
  • Bank and Building Society deposit accounts
  • Stakeholder Pensions

There are other investments available and some of the above are available for children only whereas other are particularly suitable for children but are available to everyone.

It is important to remember that children, like everyone else, have their own personal allowance which means that any income received up to their personal allowance limit is tax free and so interest can be payable without deduction of tax. However, any interest in excess of £100 which comes from parental contributions will be taxed as being income to the parent.

Maximum tax efficiency can be achieved by a combination of different types of investment, utilising both tax free investments and non-tax free investments.

In addition, having different types of investments could mean that your child has exposure to a variety of assets including cash deposits and stocks and shares, thereby potentially increasing the investment return over the longer term or reducing the investment risk profile.

You should look at factors such as interest rates, investment returns, term and conditions of the various investments to see what best suits your objectives for investing for children. If you are at all unsure, you should seek advice from an impartial financial adviser who will be able to guide you.

 Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.