Saving for Grandchildren

Is the Hargreaves Lansdown Junior ISA any good?

Opening an ISA account for a grandchild is a great way to save for a child's future. One option could be the Hargreaves Lansdown Junior ISA.

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Is the Hargreaves Lansdown Junior ISA any good?
  • The Hargreaves Lansdown Junior ISA offers a tax-efficient way of investing a lump sum or regular payments
  • Customers can invest in ETFs, investment trusts and the stock market to make gains
  • Investments can be made following the financial advice of a fund manager or following personal advice
  • The cumulative effect of investing for a child from a young age can add up to a large amount when they’re 18

FAQs - Hargreaves Lansdown Junior ISAs

  • What’s a child trust fund?

    A child trust fund can be an effective way of saving for your child. It's a long-term tax-free saving account for children born between 1 September 2002 and 2 January 2011. A legal guardian can add up to £9,000 a tax year. Then, on the child's 18th birthday, they can withdraw the funds. There's no capital gains tax or any other tax to pay.

  • Who can open an HL Junior ISA?

    A child's parent or legal guardian can open an HL Junior ISA. Other people can then pay into that account to top up funds if appropriate. Or, parents can set up a direct debit to pay regularly into the account. A child's Junior ISA can only have its funds released to the child when they turn 18.

  • Does Hargreaves Lansdown have a Junior Cash ISA?

    Hargreaves Lansdown only has a stocks and shares ISA available under the Junior ISA umbrella. So you may have to look elsewhere if you would prefer a cash ISA instead of or as well as a stocks and shares ISA. However, the Junior ISA allowance remains at £9,000 a year, even if you open both types of accounts.

  • Who regulates Hargreaves Lansdown?

    Hargreaves Lansdown is authorised and regulated by the Financial Conduct Authority (FCA). This means that they are subject to the rules set by the authority and can be fined if they do not follow the FCA's directions.

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A Junior ISA (or JISA) is a tax-efficient investment account for people under 18. Only a parent or legal guardian can open a Junior ISA for their child. However, other people will be able to pay into the account. Currently, £9,000 is the Junior ISA allowance per tax year. 

These products can either be:

  • A cash ISA, which earns a set rate agreed upon at the account's opening 
  • A stocks and shares ISA where investments in stocks, funds or bonds are made to achieve an uncapped return. 

One of the biggest attractions of JISAs is the tax rules. No tax is liable on any Junior ISA investment that earns dividend income or makes a gain when sold.

When the child turns 18, they can access the funds. They can then use it according to their circumstances and wants. So while grandparents or parents may want them to use the money to go towards university or a house deposit, the 18-year-old may have different ideas! 

Save for your grandchildren's future by checking out the UK's leading Junior ISA providers now.

What you need to know about the Hargreaves Lansdown Junior stocks and shares ISA

Hargreaves Lansdown has long been a popular ISA provider for customers happy to manage their investments or purchase other investment options, such as exchange-traded funds, for a JISA. Here are some more things worth knowing about this product.

Stocks and shares vs cash

The most important thing to know about Hargreaves Lansdown ISAs is that they only offer a stocks and shares ISA and not a cash ISA. It means you have to buy the child's investments to see the money grow instead of simply earning an interest rate set out from the start, as you would with a Cash ISA. 

HL Junior ISA charges

As of 2022, the annual charge you will incur when opening one of these accounts is 0.45%. The dealing charges you may face when trading depend on the chosen investments. 

Investment options

At the moment, account holders can choose from over 3,000 funds, UK and overseas shares, investment trusts, bonds and exchange-traded funds. It means you can build a diversified portfolio according to your risk tolerance and profile. 

Account links

Hargreaves Lansdown offers many other types of investment products, from SIPPs to General Investment accounts, amongst others. If you open an ISA for your child or grandchild, you can link them to your Hargreaves Lansdown accounts so you can manage all your money from the same platform. 

Investment ideas

Hargreaves Lansdown has a reputable research arm which means it can provide investment ideas from its expert analysts to its customers. So you could benefit from those ideas, which may highlight an investment you may have otherwise overlooked. 

Opening a Hargreaves Lansdown Junior ISA

The tax benefits of opening a Junior ISA are not to be sniffed at. It's a much-misunderstood fact that a child UK resident does not pay tax. They do, but they rarely meet the personal tax allowance limits to cause them to pay a tax bill. 

With a Junior ISA, they will never be subject to capital gains or the personal savings limit that other investments can have to pay. Instead, with each dividend they receive and every time they sell a FTSE stock that has gone up in price, they'll be shielded from having to pay tax.

Over the 18 years you can have an ISA open for a child, the cumulative effect of that income and growth can add up to a considerable amount.

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