The main disadvantage of a Junior ISA is that your child will get free reign over all of the money at 18. Parents who are struggling to decide if they will trust their future kid’s responsibility and resolve may want to consider alternatives.
If you are not using all of your personal ISA allowance of £20,000, you could consider investing your child’s money within your own tax-free wrapper. Adults can have both a Cash ISA and a Stocks and Shares ISA so your choices are not limited.
You can then gift the money to them at a time you feel is right, whenever that may be. You don’t even have to gift all of the money in one go. The point is, you have control.
The drawback is that you consume your own personal allowance. However, if you are already putting in less than £200,000 or are a couple and as such have a combined £40,000 ISA allowance, then this may not be necessary to consider.
The downside is that if something happens to you as a parent, without a will, your money may not end up in your children’s hands. A will can be set up easily to cover these occurrences by using an online will writing service.