Monzo, a prominent UK digital bank, has rolled out a Junior Stocks & Shares ISA that lets families put money aside for a child’s future through its app.
The product is set up and run by a parent or legal guardian, known as the Registered Contact, who makes the investment choices and handles transfers. Grandparents, other relatives and family friends can also add money using a shared gifting link. This lets birthday gifts, holiday money and regular top-ups all go into a single pot. The gifting link feature will reach customers gradually over the coming weeks.
Up to £9,000 can go into a child’s Junior ISAs tax-free in each tax year. Account holders can pick from Monzo’s selection of investments and switch between them whenever they like. Monzo charges no platform fees, though customers still pay a fund management charge that depends on the investment selected.
The account is open to children aged between 0 and 16. The money belongs to the child from the outset and can’t be accessed until they reach 18. Under standard circumstances, parents can’t make early withdrawals. Children aged 16 and 17 won’t be able to manage the account at launch. When the child turns 18, the account becomes an adult Stocks & Shares ISA automatically, once identity checks are completed. Cash transfers in and out are handled through Seccl.
The launch is backed by Monzo data on the saving habits of its more than one million young customers. Around one in seven young savers keep more than one Savings Pot, and 55% label their Pots with specific goals. Over 26,000 children have a Pot called “Future”. Others are saving for things like a house, investments or charity, while some have gone for vaguer names such as “IDK” and “Things”. The most organised young saver runs 18 separate Pots.
Saving habits also seem to form with age. Eleven, when children start secondary school, is the most common age to open a first Pot, accounting for about 13% of young savers. Nearly one in five allowance payments (19%) arrive on Friday afternoons between 3pm and 4pm, as the school day ends.
Monzo general manager of wealth Jo Phillips said, “With more than one million young customers already using Monzo, we know how important it is for families to build strong financial habits early. From weekly allowance top-ups to tax-free long-term investments all in one place, bringing the Junior Stocks & Shares ISA into the app takes our wealth ecosystem for families one step further.”
Phillips also offered some advice for parents. She suggests talking openly about money at home so that children learn about saving, budgeting and investing before they start work. She recommends small automatic transfers of £5 or £10 rather than large one-off sums. She also reminds families that the £9,000 allowance resets every April and can’t be carried over, so relatives such as grandparents and godparents can all help fill it.
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