Saving for your child’s future - whether that’s uni fees, a deposit on their first home or a first car - is so important. But it’s something that easily falls off the to-do list, especially when you have young children underfoot. So we were excited to hear about an ISA that’s simple to set up and talks you through all the difficult decisions - even if you’re not particularly money-minded.
We asked consumer journalist and mum to two primary-aged children, Iona Bower, to road test the Wealthify Junior ISA and find out more about it. Here’s her first look.
Who is Wealthify?
Wealthify offers investment products, including ISAs, JISAs (Junior ISAs) and pensions in a simply presented and user-friendly format.
Its products are designed to be totally transparent and easy to navigate, and Wealthily holds your hand every step of the way to empower you and give you all the information you need to make the right financial decisions for you and your family.
What is the Wealthify Junior ISA?
A Junior ISA is a tax-savvy way of saving for your child’s future because you don’t pay tax on any of the profit made.
The Wealthify JISA is a Stocks and Shares ISA (rather than a Cash ISA) so the money you put in is invested in a portfolio of stocks and shares, rather than simply sitting in an account. This means that it can earn more money than it might in a Cash ISA, but it’s also possible to lose money if stocks and shares fall.
How does it work?
You set up an account with an initial amount (it can be as little as £1) and add a monthly direct debit too, if you wish.
Choose your investment style
Once you’ve input details for you and your child and added an initial amount, the site talks you through choosing your ‘investment style,’ which should reflect your approach to risk as well as your current financial situation.
You choose between five ‘styles’: cautious, tentative, confident, ambitious and adventurous. For each style, you can pop in the amount of money you want to invest and use sliders to see how much you might be likely to make or could lose. Our tester initially (and confidently) went with ‘confident,’ but having completed the suitability questions for risk appetite, decided to downgrade to ‘tentative.’ You should, however, be aware that these are only forecasts and not reliable indicators of future performance.
Our tester loved this element - it’s essentially a questionnaire on how you feel about risk, investments and losing various amounts of money. Wealthify isn’t allowed to give you any actual advice about money, so this is a really helpful way to make a more informed decision.
We also loved the downloadable sheets for each investment style, which explains really clearly what sort of portfolio you’d get with each style and why, answering questions like how foreign investments increase risk, and how the chances of losses or gains work with each type of portfolio.
Review and invest any time you like
Once you’ve made your choices, you get a chance to review them before everything is sent through to your email address for safekeeping. After the plan is set up, you can always view your child’s investments on the dashboard and change the type of portfolio you’ve chosen (subject to suitability).
You can also invest money any time you like, and if grandparents, godparents and the like want to add money for Christmases and birthdays, or even give them a monthly investment, that’s really easy to do too.
Invite family members and friends to be contributors
You can invite anyone to be a contributor via email at the touch of a button on your Wealthify dashboard, so they can read all about it and decide how much and how often they want to invest. It means there’s no pressure - you don’t have to do a thing - and you won’t have to remember to cash any cheques or keep envelopes of cash safe for your children.
Set savings goals
You can set targets for your child’s ISA to help you hit a particular goal you might have in mind, and can check in on it whenever you want to see if you’d like to increase your contributions or make changes to the portfolio to help you reach your target.
The money could grow until your child is 18 years old, at which point they can access it and it becomes a standard (rather than Junior) ISA.
Who is the Wealthify Junior ISA for?
Junior ISAs (or JISAs) are for any child under the age of 18 who is resident in the UK. You can have other ISAs at the same time (though you must not exceed the annual limit on investment), but you can’t have a Child Trust Fund as well as a Junior ISA. These ended on 2 January 2011, so most children under 11 won’t have one of those to worry about. You can, however, transfer a Child Trust Fund to a JISA.
The Wealthify Junior ISA is aimed at busy parents who want to keep tabs on their child’s investments easily as well as those who might be nervous first-time investors and would like things explained in a transparent and simple format.
What is the Junior ISA allowance?
The Junior ISA limit is £9,000 (for tax year 2020/2021) per child - but you can spread this across more than one product if you wish. So if you wanted, you could start a Cash ISA as well as a Stocks and Shares ISA like the Wealthify one.
How easy is the Junior ISA to set up?
Our parent tester said that it really couldn’t have been easier to set up the Junior ISA. It took around 10 minutes for her to set up each one (she set up two), and if you have your bank details and National Insurance number to hand, it’s even quicker.
Her only complaint was that she couldn’t set up ISAs for both children at once. However, the system saved many of the details from the first account, so the second account was marginally quicker to sort.
To set up an account, you pop in your child’s basic details (name, date of birth, home address, etc) and then set up the account with an initial amount. You can do this with as little as £1, so if you aren’t yet sure about how much you want to put in and just want to get the ball rolling with an account, then the JISA will cater to that need.
Our parent tester set up two JISAs with £1 in each and then went back later to set up a monthly direct debit for each account once she’d decided how much she wanted to invest. She found it really easy to log in again and make any necessary changes.
There were no complicated questions to answer and no proof of identification needed, however there was a slight hitch in that, once set up, our tester had no recollection of having entered a password, which was needed to get back into the account. But it was all sorted with a quick Live Chat with a member of the Wealthify team and, within minutes, a password was created and everything was up and running.
Confirmation comes by email immediately and you’re able to check in on the plans online to see when the first payments arrive.
Are there any fees?
Yes, but they are low and very clearly set out. There’s an annual management fee of 0.6% of your savings. There’s no charge for changing your portfolio or transferring into or out of the JISA. Other fees can apply but, again, these are kept low: 0.16% on the Original Plan and 0.7% on the Ethical Plan.
There’s also a slider tool on Wealthify’s website where you can see exactly how much your fees would be according to how much you’ve invested.
What are the standout features of the Wealthify Junior ISA?
We really liked the option to choose the Ethical portfolio, mentioned above, where your money is invested into companies that are committed to doing good.
The way the investment styles are set out and explained is also really user-friendly. Our tester came away feeling she had definitely made the right decision, but also really understood the way it all worked and had learned a fair bit about stocks and shares too. The fact sheets that you’re emailed afterwards on the choices you made are particularly useful.
Finally, we thought the design of the website was very well done. It was so easy to navigate but didn’t look dry, in the way that many money websites do, so you’re happy to hang around and browse for a while. The slider projections, suitability questionnaire and fact files make everything really easy to understand and - dare we say it? - fun as well.
What do Mumsnet users think of Wealthify?
“I use a robo investing platform called Wealthify... You choose your attitude to risk and whether you want to invest in ethical funds and it does all the investing for you. You pay a fee but it's a very low percentage.” PedrosPony
“I was just looking at Wealthify and that looks quite simple to use and set up.” CurlyRebel
Verdict (for now)
If you need a bit of hand-holding when making money decisions for your child or just want something super simple to get set up fast, the Wealthify Junior ISA seems like a great idea.
The reviews are great. The Junior ISA has also won various industry awards, including Best Junior ISA for three years in a row at the Personal Finance Awards. And Mumsnetters rate Wealthify as a company for its transparent and informative style as well as its flexibility of choice.
You do have to remember that you can lose money as well as gain it as this is, above all, a Stocks and Shares ISA, but if you’re prepared to take a bit of a risk, you could also grow what’s there too. The investment style you choose can always be altered in the future if your circumstances or attitude to risk change, however you should note that this will be subject to suitability.
As with all investing, your money is at risk. The value of your portfolio can go down as well as up and you could get back less than you put in. The tax treatment of your investment will depend on your individual circumstances and may change in the future. You should seek financial advice if you are unsure about investing.
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