What is KidSave?
KidSave is a simple and flexible account offered by KidStart to help you build a pot of money to help your child when they start adult life. The KidSave account is a Junior ISA which can accept one-off or regular contributions from you and/or others you invite, such as grandparents. Any savings you earn on your shopping through KidStart will also be paid into KidSave. We offer two funds in which contributions can be invested and you choose how much of each fund you would like.
We also offer a KidSave ISA account for KidStart members themselves which works in a similar way and accepts contributions from the account holder only.
What is a Junior ISA?
A Junior ISA is a tax-efficient way to save or invest for a child’s future as all income and capital gains within a Junior ISA are exempt from UK tax personal tax. There are two types of Junior ISAs: Cash or Stocks & Shares. A child can only subscribe to one of each type during their childhood, and children cannot share a Junior ISA: each account is personal to one child.
The KidSave Junior ISA is a Stocks & Shares Junior ISA.
Who is eligible for a KidSave Junior ISA?
To open a KidSave Junior ISA, you must be over 18 and a parent or legal guardian of the child for whom you wish to open the account. The child must be a UK permanent resident aged under 16. We do not accept applications from US citizens.
If the child has an existing stocks & shares Junior ISA or Child Trust Fund, you must transfer it to KidSave as HMRC rules do not allow children to have more than one. It is simple to do: we will ask you to confirm details of the existing account and will then handle the transfer.
What is the Junior ISA allowance?
The annual contribution limit is £9,000 for 2022/23. Any contributions over this limit (or accounts where the child becomes ineligible for a Junior ISA for any reason) may at our discretion be invested through a general investment account (GIA) designated for the child until there is room in the tax free contribution limit in a following tax year. (The GIA does not have any tax benefits and any income and capital gains may be liable to personal tax).
Who can contribute to the KidSave Junior ISA?
Unlike many Stocks & Shares Junior ISAs, we have no minimum contribution limit. After you have applied, we will open the KidSave Junior ISA when we receive the first contribution which can come from:
- KidStart Savings earned by you on your shopping through KidStart;
- one-off or regular contributions from you; and/or
- one-off or regular contributions from others, such as grandparents, that you invite.
What happens when my child reaches 18?
Prior to their 18th birthday, we will contact the child through you to advise that they will become the owner of the Junior ISA and can access the savings as they see fit. On the child’s 18th birthday, the Junior ISA automatically converts into an adult ISA and the child will become legally entitled to manage the account. We will explain to the child how they can take over the account at that point.
Under HMRC rules, money cannot be withdrawn before the child’s 18th birthday except in the case of the child’s death or a terminal illness.
Can I withdraw money that I have paid into a Junior ISA?
No. Once a contribution has been made into a Junior ISA, it has been given to the child and is only accessible by the child once they are 18.
Can I transfer my child’s existing JISA or Child Trust Fund (CTF)?
You can transfer an existing CTF or JISA into a KidSave JISA. We will only accept transfers of stocks & shares JISAs or CTFs in the form of cash so your existing JISA or CTF Manager will have to sell any investments held in the account before the transfer is completed. We will handle the transfer for you, liaising with your existing provider, and will tell you anything you need to do once you have applied for the KidSave JISA.
What is an ISA?
An ISA is a tax-efficient way to save or invest as all income and capital gains within an ISA are exempt from UK personal tax. There are several types of ISAs and the KidSave ISA is a Stocks & Shares ISA.
The KidSave ISA requires a contribution of at least £10 to open. There is no requirement to set up a regular payment unless you want to.
Who can open and contribute to a KidSave ISA?
To open a KidSave ISA you must be over 18 and resident in the UK. We do not accept applications from US citizens. You cannot subscribe to more than one Stocks & Shares ISA in the current tax year; if you have done so, you will need to transfer this to KidSave.
Only you can make contributions or withdraw from the KidSave ISA. The annual contribution limit set by HMRC for 2022/23 is £20,000. Any contributions over this limit (or accounts where the ISA becomes invalid for any reason) will be invested through a general investment account (an account in your name which does not carry any tax benefits) until there is room in the tax free contribution limit in a following tax year.
When can I withdraw from my KidSave ISA?
You can ask to withdraw money from your ISA at any time. If the money you wish to withdraw is held in investments, the investments will be sold on the next trading day which could be 7-10 working days after your request. Payments will be made to the bank account linked to your KidSave account via BACS once the cash is available within your account and this could take a further 5 working days.
You can only make one withdrawal request at any time.
Investments in a Stocks & Shares ISA should be regarded as longer term investments.
What can the KidSave account be invested in?
You can choose to invest in two funds offered via KidSave. The two funds are the Fidelity Global index fund which aims to track the performance of global stock markets and the Legal & General Cash Trust fund which aims to provide returns in line with money market rates.
Your contributions will be allocated to the two funds according to the split you set when you apply and you can change this allocation through the KidStart website after the account is opened.
Purchases and sales of funds through KidSave are made daily on each working day. When cleared contributions are received into your account, an instruction is created to purchase investments in the proportion set by your allocation in place at that time.
If you change your allocation, trades are automatically created for the for the next valuation point to adjust your existing holdings to your new allocations as well as changing how your contributions are invested going forward. This process can take up to 5 working days as we have to wait for the proceeds from the sale to settle before buying the other fund.
For example: if your existing holdings are 90% by value in one fund and 10% in the other, moving your allocation to 50:50 will result in selling one fund and buying the other so that you end up with 50:50.
Why don’t you allow over 80% in the L&G cash trust fund?
The L&G Cash Trust invests in lower risk, lower return investments such as short term deposits, government bonds and similar. The returns from a portfolio which is 100% invested in the L&G cash trust may be lower than putting money into a cash Junior ISA with a bank or building society so we don’t offer this as you may be better off contributing to a cash ISA/JISA if you want a 100% cash allocation.
Will you help me decide how to invest?
No. KidStart is not authorised to provide any advice on tax or financial service related matters. If you need advice, then you should contact a suitably qualified financial adviser.
Does KidSave have any charges?
KidSave has a simple and inexpensive fee structure, which consists of
- An annual management fee equal to 0.5% of the value of the KidSave account
- The funds we offer have annual charges deducted from the funds themselves of 0.12-0.15%
More details on charging are available in the terms and conditions; for example we may charge for paper copies of statements.
How are my investments and money protected?
Your money and investments are held under Financial Conduct Authority client money and asset rules by our Custody Provider, Seccl Custody Limited, who are authorised and regulated by the FCA.
Your investments are covered up to £85,000 under the Financial Services Compensation Scheme.
How do I set up a direct debit?
When you open a KidSave account, we will ask you to set up a direct debit instruction for the bank account you wish to use to make any contributions. This should be a bank account in your name and we will carry out verification checks on this. We ask for details even if you have decided not to make a contribution at that point so that it is easy for you to do in future.
We will notify you by email when the direct debit instruction has been set up. This will be when we have completed our anti money laundering checks, normally within a couple days of you making the application. It can be delayed if we require further information from you such as a transfer form, or if you are not making an immediate contribution. In these cases, we will let you know by email when the instruction will be set up.
We will use a different instruction for each account that you open. Each has a separate reference which we will communicate to you. So if you have two children with KidSave accounts, you will see two separate direct debit references and payments on your bank account.
Direct debits are covered by the direct debit guarantee as outlined on the direct debit instruction and in the direct debit confirmation email that we send you.
What is the name on the Direct Debit?
We use FastPay Limited, an FCA authorised payment services provider to set up and arrange collection of Direct Debits.
Money collected by them via Direct Debit is put into a client money bank account operated under FCA client money and asset rules by our FCA authorised platform provider, Seccl Custody Limited. The Direct Debit instruction on your bank account appear as “KidStart Limited t/a Beansatlk / KidStart” or “Beanstalk” (depending on how much information your bank shows you on your account.)
When are Direct Debits collected?
We collect one off top ups and regular monthly contributions at different times as detailed below. We will notify you by email in advance of
- i) A first regular monthly contribution or any changes to timing and amount thereafter;
- ii) All one-off top ups or payments.
We collect regular contributions on the 18th of each month. If the 18th falls on a weekend or clashes with a public holiday then the collection date will be the first working day after the 18th.
We send payment instructions to the bank 5 working days in advance of the 18th. This means that if you set up or request a change to the regular instruction within 5 working days of the 18th, the change will be made the following month.
We will notify you by email 5 working days in advance of a new regular contribution or any change to the timing and amount thereafter.
One off top ups
We typically collect one off top ups weekly on Mondays. If the Monday clashes with a public holiday, then the collection date will be the first working day after.
We send payment instructions to the bank 5 working days in advance. This means that if you request a top up, we will collect it on Monday week after you requested the top up.
We will confirm your top up to you by email 5 working days in advance of collection so you know the exact day it is going.
We will notify you by email for every top up 5 working days in advance of collection
When does money get invested?
Buying and selling of funds happens daily on each working day.
Funds are priced based on the value of their underlying holdings and most funds will calculate and publish a price every working day typically at noon, meaning there is no continuous pricing of fund units during the day. (To check when your funds value, you should check the specific KIID for the fund).
When a contribution is received into a Beanstalk account, it triggers an order to be placed according to the allocation in place at the time. Orders will generally be routed by the custody provider to the appropriate fund manager for execution at the next available valuation point for the particular fund, which depending on when the cleared contributions are received in the account and the time taken to place the order could be the same day or the next working day.
For clarity, the forward pricing system used by funds means that you will not know the exact price at which you will buy or sell. Contributions made to your account are initially made into a pooled client account held by the Custody Provider before being reconciled to your Account and, although this will typically happen immediately, it can take longer so that we cannot guarantee when contributions made will be traded.
Can't find the answers you are looking for?
Check out KidStart FAQs for more answers.
Or go to contact us for information on how to contact us.