Can Parents Withdraw Money From a Junior ISA?

Junior Individual Savings Accounts (JISAs) are long-term, tax-efficient savings and investment accounts designed for children. These accounts are a product of the United Kingdom and are governed by UK tax laws and regulations. Parents generally cannot withdraw money from a Junior ISA, as the funds are intended to be locked away for the child’s future financial benefit.

Who Can Access Junior ISA Funds

The funds held within a Junior ISA legally belong to the child for whom the account was opened. The primary rule for accessing JISA funds is that the child must be 18 years old to make any withdrawals. This restriction is in place to ensure the savings mature and are available for significant life events, such as higher education, purchasing a first home, or starting a business.

While the child cannot withdraw money until they are 18, they do gain a degree of control over the account earlier. At 16 years old, the child can take over the management of their Junior ISA. This includes making decisions about how the money is invested, such as choosing between cash savings or stocks and shares. However, this management authority does not extend to the right to withdraw any funds before their 18th birthday.

Limited Exceptions for Accessing Funds Early

There are limited circumstances under which Junior ISA funds might be accessed before the child turns 18. These situations are not general parental withdrawal rights but rather exceptions for severe and unforeseen events. The primary exceptions are in cases of the child’s terminal illness or death.

For a terminal illness, an application must be made to HM Revenue & Customs (HMRC) using a specific terminal illness early access form. If approved, the registered contact can then withdraw the funds. If the child passes away, the funds within their Junior ISA would form part of their estate.

Parental Management of a Junior ISA

Parents or legal guardians play a significant role in managing a Junior ISA. A parent or guardian with parental responsibility can open a Junior ISA for a child under 18. Once opened, anyone can contribute to the account, including grandparents, friends, and other relatives. The total amount contributed to a Junior ISA cannot exceed the annual allowance, which is £9,000.

Parents can choose the type of Junior ISA, whether it’s a cash Junior ISA for savings or a stocks and shares Junior ISA for investments, or a combination of both. They can also make decisions regarding the investments held within the account and have the ability to switch the Junior ISA provider if they choose. While parents facilitate and manage the account, it is important to remember that the money is legally the child’s and remains inaccessible to the parents for withdrawal, reinforcing its purpose as a long-term savings vehicle for the child’s future.