Investment Junior ISA
The simple way to give your child a solid financial start in life, with tax-free* returns and a capital guarantee on premiums invested over 5 years.
Why choose this plan?
- Available to all children under 18 who do not have a Child Trust Fund (CTF)
- OR, if your child holds a CTF or Junior ISA elsewhere, it can be transferred to us
- Save from as little as £10 per month / £100 single premium up to £4,368
- Policy must be opened by the child's parent or guardian
- Top-ups can be made by anyone at any time
- Potential of tax-free* investment growth through bonuses
- The 2019/20 Interim Bonus rate is 4.50.% (bonuses are not guaranteed)
- The JISA value could be reduced if withdrawn during adverse market conditions, but money invested for 5 years or longer is guaranteed
Please read the product Q&As and Key Information Document before proceeding.
What is a Junior ISA (JISA)?
JISAs are investments with tax advantages for children, which were made available by the Government with effect from 1 November 2011. There are two types of JISA available – Stocks & Shares JISAs and Cash JISAs. Sheffield Mutual offers only a Stocks & Shares JISA in the form of a with-profits insurance policy, which is designed for medium to long term investments of this kind. We refer to this as an Investment JISA because the with-profits fund invests in a range of different assets including property and bonds as well as the stock market. JISAs could be an ideal way to build up a tax free lump sum to give a young person a good financial start in life - perhaps as a deposit for a first home, or as help towards university fees and expenses.
Who can have a Junior ISA?
JISAs can be opened on behalf of children under 18 years of age. Children born between 1st September 2002 and 2nd January 2011 should have a Child Trust Fund (CTF), in which case the full value of the CTF would need to be transferred as part of the Junior ISA application. (see “Can I transfer my CTF to a Junior ISA?”)
If you are unsure whether your child has a CTF or want to find out where it is held, please visit www.gov.uk/child-trust-funds and complete a short form for further information.
The child must be resident in the UK when the JISA is opened (or a dependant of a crown servant living overseas). Although the funds in the JISA belong to the child (the ‘policyholder’) at all times, the JISA policy must be opened and operated by a ‘Registered Contact’ until the child reaches at least 16 years of age. The Registered Contact will be the person with parental responsibility for the child, with the child able to take over as the Registered Contact, if they wish, at age 16.
Can a child have different JISAs?
Every eligible child can hold both a Stocks & Shares JISA and a Cash JISA at any one time with the same or different product providers, providing the overall investment allowance is not exceeded (see below).
What amounts can be saved in a JISA?
The Government sets the investment limits for JISAs and the current allowance for the tax year which runs from 6th April to 5th April is £4,260 or £355 per month. This amount can be split between a Stocks & Shares JISA and a Cash JISA, providing the overall limit is not exceeded in the tax year (6 April to 5 April). The minimum in the Sheffield Mutual Investment JISA is £10 per month or a single lump sum of £100. The Society has an overall discretionary holding limit of £300,000 per member.
How long is the money invested?
The JISA will mature when the child reaches 18 years of age. At this time the child can withdraw the funds or rollover the investment in to an adult ISA in their own name. Withdrawals are not allowed at any time before age 18.
How do the child’s savings grow?
Depending upon the performance of our investments, the Society will declare a bonus rate annually in March and this will be applied to the JISA policy at the end of the tax year. The amount of bonus credited to the policy will depend on the amount invested (known as policy premiums) and, as bonuses are calculated daily (after deducting charges) on a compound basis and added monthly (net of charges), the length of time the policy has been running. The Registered Contact will receive a statement during April each year setting out the amount of bonus and present value of the JISA policy. There is also the possibility of a final (terminal) bonus on maturity of the JISA. Bonuses are not guaranteed.
Can I add to the child’s investment?
Yes, providing you don’t exceed the maximum annual investment allowance you can add to the JISA at any time during the tax year. If you are not subscribing on a monthly basis by direct debit the minimum additional investment is £50. Any person can subscribe to the child’s JISA - including parents, grandparents, family members and friends. All subscriptions will be classed as gifts to the child, which means that once premiums have been added to the JISA, under normal circumstances (except on early death or the diagnosis of a terminal illness), the funds cannot be withdrawn until the child reaches the age of 18. Call us on 01226 741 000 to top up by debit card.
Can I stop making subscriptions?
Yes, you can stop or vary the level of subscriptions at any time. However, the Society retains the right to terminate the policy in circumstances where you have not invested the minimum initial premium of £100 for single premium JISAs or £10 per month for 12 months for regular premium JISAs.
Where are the funds invested?
The Investment JISA is invested in the Society’s with-profits fund, which will include property, shares, fixed interest (including UK Government Gilts) and cash. The fund is managed to provide a low - medium risk investment. Unlike investments that are invested directly in shares or a share tracking index, the money you invest in the Society’s with-profits JISA will not normally fluctuate from day to day. However, should you wish to withdraw or transfer funds from the JISA during adverse investment conditions, the Society may apply a Market Value Reduction to the policy fund, which could in some circumstances, result in you receiving back less than you paid in. Therefore, the amount you receive on repayment is not guaranteed and you should only invest in an Investment JISA if you are prepared to take some risk to increase the potential returns.
Are there any guarantees?
Where a Market Value Reduction has been applied and providing the premiums have been invested for more than five years, the Society guarantees that you will get back a minimum 100% of the premiums in the event of a death or terminal illness claim, or on maturity of the policy at age 18. No guarantee is given in respect of premiums paid within five years of the date of the claim or maturity.
Can I withdraw from the child’s JISA?
No, the funds in a JISA are not available for withdrawal until the child reaches 18 years of age and, at this time, the JISA maturity proceeds will be paid to the child and not the Registered Contact.
Are there any charges?
Yes, the Society will deduct 1.5% of the value of the JISA policy fund each year to cover administration and expenses. The annual charge is normally deducted from the declared annual bonus amount before it is added to the JISA policy. However, it would be deducted from the policy fund should the bonus amount be less than the annual charge.
What about tax?
Just like adult ISAs, no tax is payable on any of the income or capital gains a child receives from JISA savings and investments. In addition, no tax is payable by a subscriber to the policy on any income or gains generated by the JISA, even where that income exceeds the £100 limit which normally applies to gifts from parents. This is based on current tax legislation, which may vary in the future.
What happens if the child moves abroad?
Provided the monies come from a UK bank account, you and your family and friends can continue to pay money in, subject to the JISA limits.
What happens if the child dies or is diagnosed with a terminal illness?
In the unfortunate event of early death or the diagnosis of a terminal illness, the Society will pay 101% of the policy value to the child’s estate or personal representative. Closure of the JISA in relation to a terminal illness must be agreed by HM Revenue & Customs. Bonus will be paid tax free up until the date of death.
What happens if the Registered Contact dies?
In the unfortunate event of the death of the Registered Contact, the Society will need to see the original (or certified copy) death certificate. Another person with parental responsibility for the child (or the child if aged 16 or over) should then apply to become the new Registered Contact.
Can I transfer the child’s JISA with another provider to Sheffield Mutual?
Yes, you can transfer previous years’ JISA subscriptions in whole or in part from another provider to Sheffield Mutual, without affecting the annual investment allowance. Current tax years’ JISA subscriptions must be transferred in full. Transfers can be made either way (i.e. Cash to Stocks & Shares or Stocks & Shares to Cash) and are subject to the child not having more than one JISA of each type (Stocks & Shares and Cash) at the end of the transfer process. This means that part transfers can only be made to another type, for example, part Cash JISA transferred to a Stocks & Shares JISA. The Society can supply you with the appropriate JISA transfer form on request (or you can transfer online). The minimum investment is £100.00, so if your transfer amount is less, you will need to make it up to £100.00.
Can I transfer a CTF to a Junior ISA?
Yes, those with a Child Trust Fund may transfer to a Junior ISA should they wish to. This must be the whole amount as partial transfers are not allowed. Any such transfer will not count towards the child’s Junior ISA allowance. Transferring a Child Trust Fund to a Sheffield Mutual Investment Junior ISA is simple, you can apply/download a Transfer Form online or contact the Society and we'll post you out an application pack. You will not have to contact the Child Trust Fund provider yourself.
A CTF may be transferred even if, at the time of the transfer, the child would not meet the normal UK residency conditions for a Junior ISA.
How do I start my Junior ISA?
Simply click on the “Get A Quote / Apply Now” button where you will have the option to:-
- Get a quote on-line
- Apply on-line or
- Download an Application/Transfer Pack
View/Download/Print the Product Brochure and Key Information Document
If you choose to apply on-line, this will be submitted to the office where we will check and print out your application and then post it out to you to sign and return.
If you choose to complete a paper application please follow the checklist provided in the application pack and send your application to:
Sheffield Mutual Friendly Society, FREEPOST RLUC–XKZE–RJAT, 3 Maple Park, Tankersley, Barnsley, South Yorkshire S75 3DP along with a cheque for the initial premium made payable to "Sheffield Mutual" (where applicable). If you prefer we can take your first premium by debit card over the phone.
Where can I get further help or information?
Our friendly and knowledgeable staff would be pleased to provide you with factual information about the Society’s products and services, so you can make your own choice about how to proceed. No advice or recommendations will be given and if you are in any doubt as to the suitability of a product, you should seek advice from a suitably qualified financial adviser, which may incur a fee.
Need help with some of the language we've used? Click here for our Jargon Buster.
Bonus – an amount we will add to your policy linked to how well the with-profits fund has performed. These can be annual bonuses or a final bonus, added when your ISA is closed or transferred.
Cash JISA – a tax-free deposit account which earns interest. Although less risky and more certain than a Stocks & Shares JISA, the returns may be relatively modest over the longer term.
Market Value Reduction – an adjustment made to the amount we pay out, should your policy fund be worth more than your fair share of the With-Profits fund.
Policy Fund/Policy Value – the value of the amount paid in plus any bonuses added to your JISA.
Stocks & Shares JISA – a tax-free wrapper for investments other than cash deposits.
With-Profits – the name given to a type of fund which normally contains a mix of assets and shares the profits or losses with the policyholders. Returns are ‘smoothed’ whereby some profit is held back in good years to maintain returns in poorer investment years.
* All references to taxation are based on the Society’s understanding of current tax legislation and practice, which may change in the future.
The application process should typically take around 10 mins