How Old Do You Have to Be to Invest in Stocks in the UK?

The good news is that you can start investing as early as you want in the UK. And the even better news is that you can do it without havng to pay any tax on the profits. In this guide we’ll explain how and when you can start investing in the UK.

Can You Invest in Stocks Under 18?

Yes. Although someone under 18 cannot normally open a standard investment account themselves, a parent or guardian can invest for them.

Your parents can also open a Junior Stocks and Shares ISA (tax-free) account or a Junior SIPP (pension).

In the UK, you generally need to be 18 years old to open an investment account and buy stocks and shares yourself. However, children can still invest before they turn 18 if an account is opened and managed on their behalf by a parent or guardian.

Junior Stocks and Shares ISA

One of the most common ways to do this is through a Junior Stocks and Shares ISA (JISA). A parent or guardian can open a Junior ISA for a child under 18, although once the child reaches 16 they can usually open one themselves.

Money held within a Junior Stocks and Shares ISA can be invested in assets such as shares, investment funds, ETFs and investment trusts, depending on what the investment platform offers.

The important point is that the money belongs to the child. They cannot normally withdraw it before turning 18. At 18, the Junior ISA automatically becomes an adult ISA and they gain control of the investments and money.

What Happens To Your JISA When You Turn 18?

Once you are 18, you can open investment accounts in your own name. These can include a Stocks and Shares ISA, a general investment account (GIA) or, depending on the provider, a pension such as a SIPP.

You can then make your own decisions about which stocks, funds and other investments to buy and sell.

An ISA is often a good starting point because investment returns within an ISA are sheltered from UK capital gains tax and income tax.

Parents can also invest for children outside a Junior ISA. For example, some investment platforms offer junior investment accounts or bare trusts, where investments are held for the benefit of a child.

Junior SIPPs

Another option is a Junior SIPP, which allows parents or guardians to start investing towards a child’s retirement. However, pension money is locked away until the minimum pension access age applicable at the time.

Children can also invest through a Junior SIPP (Self-Invested Personal Pension). A parent or guardian usually opens and manages the pension on the child’s behalf until they turn 18, with the investments held for the child’s future retirement.

You can generally contribute up to £2,880 each tax year, with basic-rate tax relief increasing this to £3,600. Junior SIPPs can invest in shares, funds, ETFs and other investments depending on the provider.

The major difference compared with a Junior ISA is access: money in a Junior SIPP is intended for retirement and cannot normally be withdrawn until the minimum pension age applicable to the child in the future. This very long investment horizon means even relatively modest contributions made when a child is young have decades in which to potentially grow.

What Is the Best Age to Start Investing?

The truth is, the earlier start, the more money you will make in the long run.

Don’t believe us – try our investment returns calculator to see how much starting a few years earlier can make.

As an example, if you invested £100 a month at 5% from the age of 16 when you turn 30 you will have £24,460, but if you wanted until you turned 18, you would only have £19,858.

So you see those two years and £2,400 actually make a difference of £4,602.

However, there is no perfect age to start investing, but starting young can be particularly powerful because investments have more time to potentially benefit from compound growth.

Even relatively small regular investments made during childhood or early adulthood can build into a significant portfolio over several decades. However, stock market investments can fall as well as rise, so investing is generally more appropriate for money that will not be needed in the short term.