Rules on Junior ISA transfers

larchfield

Hi all, wondering if someone can help me with the general rules around Junior ISAs. I've got one in one of my children's names that I'd like to actually just have in a standard savings account in their name. Is this possible? Is it allowed? Thanks!

Malthusian

Nope, unless they are terminally ill.

Closure of the JISA

A JISA can only be closed on:

the death of the child
the child reaching their 18th birthday
direct instruction from HMRC (where the JISA is void)
when a £nil balance arises in the following circumstances:
a JISA has been opened and a small initial investment has been made, but contributions then stop and agreed charges then bring the balance down to £nil
a terminal illness claim has been accepted and the registered contact has withdrawn the funds held in the JISA.

In addition, where all of the investments in a JISA have been transferred, a provider may close the remaining £nil balance account.

In other words, until age 18 you can only transfer a JISA, not close it.

What are you hoping to achieve? I am struggling to think of any reason why you would want to make tax-free money taxable.

xylophone

Are you looking for a better interest rate? Currently the Coventry BS offers 3.6% on the JISA.

larchfield

Hi all, thanks for the replies and pointers. I have JISAs with NS&I and their service and communications have been below par, in my opinion. And I've realised recently that it's actually more due to their being no 'current account switching service' or guarantee for things like ISA transfers. Getting one moved into NS&I was a nightmare, and one (unspecified) day, the balance from the former JISA just disappeared with no warning from NS&I or my former provider. Anyway, I'll have a look around for some better rates, but just wanted to share. Thanks for the comments.

Malthusian

larchfield wrote: »

Hi all, thanks for the replies and pointers. I have JISAs with NS&I and their service and communications have been below par, in my opinion. And I've realised recently that it's actually more due to their being no 'current account switching service' or guarantee for things like ISA transfers.

Money in JISAs is inherently more "sticky" than people's own money that can be withdrawn at will. And there is less potential for cross-selling as children can't borrow money or take out expensive travel insurance. In NS&I's case there is a limit to how much they are prepared to use taxpayer's money to subsidise people well-off enough to have JISAs.

Unless the child turns 18 in the next 5-10 years and plans to spend all the money then, you should consider investing their money in something more suitable for the long term.

bowlhead99

larchfield wrote: »

. And I've realised recently that it's actually more due to their being no 'current account switching service' or guarantee for things like ISA transfers.

There isn't a current account switching service for JISAs, but then there isn't a current account switching service for other types of savings accounts either, so moving to a 'standard savings account' in the child's name wouldn't be helpful in that respect, even if it were allowed.

There is a guarantee that you won't lose money when you transfer the JISA but there isn't a guarantee it will take X days (though guidelines from HMRC do specify a reasonably short period of time for cash ISA transfers so you could perhaps complain if you lost out materially by it taking longer). As you are taking about cash products it's not like you have been out of the market missing out on untold riches from stock market movements during the transfer process, and the money was never 'accessible' anyway because the child isn't 18, so the transfer process hasn't prevented you doing what you wanted to do with the cash.

Getting one moved into NS&I was a nightmare, and one (unspecified) day, the balance from the former JISA just disappeared with no warning from NS&I or my former provider.

If you yourself demanded your ISA to be transferred to the new provider, it hopefully wasn't too surprising that the balance that had been held at the former provider 'disappeared' without the former provider giving notice that it would happen. Instead, via your new provider, you gave them notice that it must happen, and presumably chased it up...