Investing for Teens (13–18): Build Habits, Build Wealth. a Guide for Parents & Teens (UK & US, 2025)
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Why the Teen Years Are the Sweet Spot
Teens don’t need Wall Street swagger — they need a safe sandbox and a simple plan. Start now and you gift them decades of compounding, practical money confidence, and a healthy “earn → save → invest” loop. We’ll keep it calm, clear, and values-first — the Slow Money way.
Four reasons to start at 13–18:
Compounding: Small, regular contributions over long stretches beat big, late sprints.
Confidence: Owning an index fund demystifies markets and tames headlines.
Work ↔ Money link: A slice of paycheques into long-term accounts sets an adult habit early.
Values in action: Teens care about impact. Portfolios can tilt ethical/ESG without hype.
The Teen Stack (Works in UK and US)
Short-term spending/learning app (card, budgets, chores → habits).
Long-term wrapper (UK: JISA, Junior SIPP; US: UGMA/UTMA, Custodial Roth IRA).
Simple investing platform (ready-made portfolios or broad ETFs; parent controls/approves).
We’ll split by region so you can go straight to what applies at home — just good, reputable choices.
🇬🇧 UK: Junior ISAs, Junior SIPPs, Teen Apps
Junior Stocks & Shares ISA (JISA): The Core
What it is: Tax-free investing wrapper for under-18s; a parent/guardian opens and manages. Allowance: £9,000 per child for the 2025/26 tax year (combined cash + stocks) — locked until 18 (then converts to adult ISA). (check latest: UK Gov JISA overview) GOV.UK
Why it’s great for teens: Long enough horizon to benefit from markets; withdrawals blocked (saves them from 3 a.m. impulse buys).
Who can pay in: Parents, grandparents, the village — once open, others can gift straight in.
Step-by-step (5 mins to set up):
Pick a reputable provider (examples below).
Choose risk level/portfolio.
Add teen’s details + your KYC.
Automate £25–£100/month (birthday money can top-up).
Do a “Money Birthday” review each year (cake optional).
Reputable, award-winning/established JISA routes (illustrative):
Moneyfarm Junior ISA — digital, FCA-regulated, diversified portfolios.
Moneybox Junior ISA — app-based, parent-friendly, strong reviews on ease of use; also offers the Lifetime ISA at 18 for a smooth handoff.
Nutmeg Junior ISA (J.P. Morgan Personal Investing)— large UK robo; socially responsible options (check latest).
GoHenry Junior ISA — invest from £1; invested with Vanguard; FSCS cover applies to custody (capital at risk).
Mini scenario: Your 14-year-old has £300 gift money + £25/month. Set up a JISA, pick a balanced portfolio, automate. They’ll watch a pot grow — and they can’t raid it until 18. Confidence unlocked.
Child SIPP (Junior Pension): Ultra-Long-Term Head Start
What it is: Parent-opened pension. Contribute up to £2,880 net/year; HMRC tops it to £3,600 via basic-rate relief. Access at future pension age (far away!).
When it makes sense: After you’ve built habits in a JISA, use the SIPP for “future-future” money. Teens love seeing the government top-up.
Open with: Hargreaves Lansdown Junior SIPP, AJ Bell Youinvest Junior SIPP (check latest).
Step-by-step:
Open Junior SIPP with a mainstream provider.
Choose a global equity fund/ready-made mix.
Add £25–£50/month or occasional gifts; show the auto 20% uplift.
Park and let time do the heavy lifting.
Mini scenario: Grandma gifts £500; you put it into the Junior SIPP. It becomes £625 day one via tax relief — a concrete “wow” moment about compounding + government boosts.
At 18: Signpost to Lifetime ISA (LISA)
Why mention now: On their 18th birthday, they can currently open a LISA (for first home/retirement) — £4,000/year with 25% bonus. Use part of the matured JISA to seed it if the first-home goal is 3–5+ years away. (check latest on provider site before applying).
Smart transition:
If you’ve built a pot in a Moneybox Junior ISA, the same app makes it simple to roll habits forward into their Moneybox Lifetime ISA — a seamless handoff many UK parents prefer.
Other providers also offer LISAs, but Moneybox is often rated highly for ease of use and app experience.
You can use part of the matured JISA balance to seed the new LISA if the first-home goal is 3–5+ years away.
Important to know:
Withdrawals for anything other than a first home (or after age 60) incur a penalty — so make sure goals are clear.
Always check the latest rules on GOV.UK and the provider’s own terms before applying.
Teen Money Apps (UK): Learn by Doing (Save-Only vs Investing-Ready)
Investing-ready + money skills:
GoHenry UK — chores/allowance, parental controls, and integrated Stocks & Shares JISA in-app. Also see GoHenry JISA (check latest).
Save-only + money skills:
Revolut <18 — sleek budgeting, instant-access savings with variable AER (plan-dependent; up to ranges listed on site), interest compounded daily; no stock investing for under-18s. (check latest: Revolut Savings; <18 interest help)
Rooster Money, HyperJar — chore tracking, jars, goals (no investing).
Step-by-step habit loop (app + JISA):
Turn on weekly allowance + chores in GoHenry/Rooster/HyperJar.
Auto-split: 50% spend / 40% save / 10% give.
Monthly: move “save” into JISA (investing-ready) so they see cash but grow wealth.
Not quite ready to invest yet?
If your teen is still building basic money habits, start with a simple savings account instead. See our Smart Savings for Kids guide for the best accounts, rates, and habit-building tips.
Chip & InvestEngine (UK, award-winners & reputable)
These are parent-level investing tools you can use alongside your teen’s JISA/SIPP — especially once your teen turns 18 (or for pots you manage earmarked for them).
Chip — award-winning UK app (won Best Personal Finance App 2024 — British Bank Awards), combining high-yield savings with managed/automated investing; FCA-regulated; FSCS cover applies to eligible balances via partner banks/custody (capital at risk). (check latest)
Use with teens: Park short-term “gap-year” or “first-car” cash in savings; invest longer-horizon pots in diversified funds.InvestEngine — ETF-only platform with managed portfolios or DIY pies, no account fees on GIA/ISA, strong growth and industry recognition as a fast-growing ETF platform. (check latest; awards/press)
Mini scenario: You keep a parent-held ISA at Chip or InvestEngine and label a goal “First-home top-up.” Your teen tracks progress each quarter, but their own JISA remains the core teen-owned long-term pot. At 18, you help them open their own ISA (or LISA) and migrate responsibility.
🇺🇸 US: Custodial Brokerage, Custodial Roth IRA, Teen Brokerage & Apps
Custodial Brokerage (UGMA/UTMA): Flexible, Parent-Managed
What it is: A taxable account opened by an adult custodian for a minor. Child is the owner; you manage until the age of majority (generally 18 or 21; up to 25 in some UTMA states). Use funds for the child’s benefit; at majority, control transfers to them.
Taxes (Kiddie Tax, 2025): First $1,350 unearned income tax-free; next $1,350 at the child’s rate; amounts over $2,700 taxed at the parents’ rate. (check latest explainer)
Open at: Fidelity, Schwab, Vanguard — mainstream, low-cost brokers (SIPC protection applies to brokerage, not market losses).
Step-by-step:
Open a UTMA/UGMA at a major broker.
Choose a broad, low-cost ETF (e.g., total market).
Automate $25–$100/month; reinvest dividends.
Review yearly; discuss time horizon and taxes.
Mini scenario: Aunts and uncles gift $300 for birthdays. You invest it in a total-market ETF inside the UTMA. Teen watches it ebb/flow, learns staying power beats hot tips.
Custodial Roth IRA (for earned-income teens): Tiny Deposits → Massive Head Start
Why powerful: After-tax contributions grow tax-free for decades; contributions can be withdrawn anytime (earnings have rules).
2025 IRA limit: IRS shows the IRA limit remains $7,000 for 2025; teens can contribute up to their earned income (whichever is lower). (check latest: IRS IRA limits)
Open at: Fidelity Roth IRA for Kids (clear guidance and easy setup). (check latest)
Step-by-step:
Confirm earned income (W-2 job, or properly documented self-employment).
Open Custodial Roth IRA (Fidelity/Schwab/Vanguard).
Pick a target-date or total-market ETF.
Consider a parent match: “You put in $250, we’ll match $250.”
Leave it to grow. (Teach do not raid except true emergencies/first-home rules.)
Mini scenario: 16-year-old lifeguard earns $2,400 over summer. You fund $1,200 into their Roth, they keep $1,200 for life. Show what $1,200 at 16 could become by 66 — it’s eye-opening.
Teen Brokerage Where Teens Can Trade (with Guardrails)
Fidelity Youth Account (13–17) — teen-owned brokerage + debit card, no fees, no minimums; parent can view/monitor; restricted products (no options/margin/crypto/penny stocks); converts to adult account at 18. (check latest: overview, FAQs)
Step-by-step:
Parent opens via their Fidelity login.
Set deposit limits and app notifications.
Teen can buy ETFs/fractionals; you debrief monthly.
If behaviour slips, pause funding or close.
Mini scenario: Teen invests $20/week into an S&P 500 ETF and adds $5 “fun stock” experiments. They learn diversification vs hype the low-stakes way.
US Fintech Apps (Investing Tiers): Value vs Cost
Greenlight — chores/allowance card; investing in premium tiers (kid proposes trades; parent approves); fractional stocks/ETFs; subscription pricing. (check latest)
BusyKid — chores → allowance → investing with parent oversight; lower fee than many rivals. (check latest)
Acorns Early — UTMA investing in diversified ETF portfolios; part of family subscription; integrates with debit card (post-GoHenry acquisition in the US ecosystem). (check latest)
Stockpile — gifting + custodial with fractional shares; now subscription-based family plans. (check latest)
UNest — UTMA via app; easy gifting links; monthly fee; diversified portfolios. (check latest)
Rule of thumb: If your family will really use chores, spend controls, and in-app education, a paid app can be worth it. If you just want low-cost investing, a free custodial at Fidelity/Schwab wins.
Behaviour Layer: Coaching by Age
Ages 13–15
Default split: 50% spend / 40% save-invest / 10% give.
Add one micro-investing ritual weekly (£/$10 into ETF).
Celebrate streaks (8 weeks in a row = parent £/$10 boost).
Ages 16–18
First paycheque rule: 10% to Roth/JISA, 10% to emergency, rest to planned spend.
Parent match up to £/$20 per month for hitting targets.
Experiment budget: up to 10% for a single stock they pitch to you. (Quarterly debrief.)
Risks & Safeguards (Keep It Boringly Robust)
Volatility happens — we invest for years, not weeks.
Diversify — default to broad ETFs/managed portfolios; limit single-stock exposure to 5–10% “learning” money.
Scams/finfluencers — “If it sounds guaranteed, it’s not.” Teen tells you before acting on any tip.
Spending guardrails — category blocks, weekly limits, alerts (GoHenry/Greenlight/Revolut have these). (check latest on each site)
Common Pitfalls (and Gentle Fixes)
App-only, no growth → Pair app with JISA/UTMA/Roth.
Fee drag → Prefer no-fee custody (Fidelity/Schwab) or ensure you use all features of a paid app.
Skipping wrappers → UK: use JISA first; US: grab Roth if teen has income.
Roth with no earned income → Not allowed; document earnings (W-2, invoices for babysitting/tutoring).
UTMA handover surprise (18/21/25) → Start values talks early; write the purpose of the money; involve them in reviews.
30-Day Teen Investing Kick-Start (UK & US)
Week 1 — Set the Stack
UK: Open JISA (Moneyfarm/Moneybox/Nutmeg/GoHenry route). US: Open UTMA (Fidelity) and Roth if eligible.
Add app for habits (UK: GoHenry/Revolut <18; US: Greenlight/BusyKid). (check latest pages)
Week 2 — Automate & Label
Automate £/$25–$50/month into JISA/UTMA; name goals (“First car”, “Gap year”).
Set alerts; add a fridge progress card.
Week 3 — Two Micro-Lessons
“ETF vs stock” (why broad beats bets).
“Time in market” (what dips teach us).
Week 4 — Celebrate & Nudge
Celebrate any milestone (even £/$100 invested).
Offer a one-off match for the next deposit.
Conversation Scripts (Steal These)
Market dip: “Prices are on sale. We buy a little, regularly. This isn’t about this week — it’s about future-you.”
Delay a purchase: “Want it now, or want the bundle if we wait four weeks?”
ESG question: “Let’s choose a fund that screens for your values — then track if we still meet the goal.”
First pay: “Skim 20% for future-you before the sneakers. That’s how adults build freedom.”
Quick-Start Recipes
Part-time job teen (US): Custodial Roth ($50–$100/month) + UTMA ETF + Greenlight/BusyKid for behaviours. (check latest pages)
Part-time job teen (UK): JISA (£25–£50/month) + GoHenry card/app; consider Junior SIPP top-ups from relatives.
College-bound (US): Use 529 for education + small UTMA/Roth for flexibility. (info hub: Saving for College) (check latest)
Gift-heavy relatives (UK/US): Share JISA/UTMA gift link, automate monthly gifts (small but steady).
Extended FAQs (2025)
1) What’s the UK JISA allowance this year?
£9,000 for 2025/26 across cash + stocks; locked until 18. (check latest: Gov.uk JISA)
2) Does GoHenry actually offer a JISA?
Yes — invest from £1; invested with Vanguard; FSCS protections apply to custody (capital at risk). (check latest)
3) Revolut <18 — can my teen buy shares?
No; save-only with interest (plan-dependent) and strong parental controls. Investing features unlock at 18. (check latest)
4) Are Chip and InvestEngine “safe”?
They’re FCA-regulated platforms with strong reputations. Chip won Best Personal Finance App 2024 (British Bank Awards); InvestEngine is a fast-growing, ETF-only platform with no account fees on GIA/ISA. FSCS applies to eligible cash/custody; investments can fall as well as rise. (check latest)
5) Custodial account (US) vs 529 — which first?
If the goal is education, 529 often gets priority (tax-free for qualified expenses, aid-friendlier). For general goals, UTMA is flexible. Many families use both. (check latest: Saving for College)
6) What’s the 2025 IRA limit for my teen’s Roth?
$7,000, but only up to their earned income. (check latest: IRS)
7) Do I have to file taxes for my teen’s UTMA?
Maybe. If unearned income exceeds thresholds Keep statements; ask a tax pro if unsure. (check latest)
| Income Band | Amount | How It’s Taxed |
|---|---|---|
| First portion | $0 – $1,350 | Tax-free (child’s standard deduction on unearned income) |
| Next portion | $1,351 – $2,700 | Taxed at child’s rate (usually 10 %) |
| Above threshold | Over $2,700 | Taxed at parent’s rate (“kiddie tax”) |
Source: Slow Money Movement™ | Get Rich Slow at www.slowmoneymovement.com
Slow Money Tip™: These limits update annually. Keep your child’s 1099 forms and ask a tax professional if their unearned income approaches the threshold.
8) Teen trades gone wild?
Use an app with parent approvals (Greenlight/BusyKid) or restrict to broad ETFs in a custodial. With Fidelity Youth, set alerts and talk rules. (check latest pages)
9) Can my teen “ethically invest”?
Yes. Many platforms offer ESG portfolios/funds. Teach trade-offs (fees, tracking error) and keep core diversified.
10) How do we prevent a blow-out at 18/21?
Co-create a purpose statement for the account, involve them in annual reviews, and split pots (some spend-ready, most long-term).
11) Are fees worth it for paid apps?
Only if you use the features (education, approvals, chores, goal-setting). Otherwise, a free custodial at a major broker wins.
12) Can grandparents contribute directly?
🇬🇧 UK JISA: yes (most providers offer gift links). 🇺🇸 US UTMA/Roth: yes, just ensure earned income exists for Roth.
13) Crypto for teens?
Not supported for under-18s on reputable platforms. If explored at 18+, treat as speculative and cap at a small % after the core portfolio is in place.
14) Documentation needed to open?
🇬🇧 UK: child’s DOB proof, parent ID + address. 🇺🇸 US: child’s SSN/ITIN, parent ID + address; for Roth, earned income proof.
15) What changes often and needs a “check latest”?
JISA allowance, IRA limits, app interest rates, plan features, fees. Use the provider pages linked above before applying.
Clear Next Steps
🇬🇧 UK:
Open a JISA — try Moneyfarm JISA /Moneybox JISA or GoHenry JISA (check latest).
Add a behaviour app: GoHenry UK or Revolut <18.
For parent-held pots, consider Chip or InvestEngine.
🇺🇸 US:
Open a UTMA at Fidelity; if teen has income, add a Roth IRA for Kids.
For hands-on learning, consider Fidelity Youth Account, Greenlight, or BusyKid.
Education goal? Use a 529 (see Saving for College).
Start tiny: £/$25 this month. The habit is the headline — the numbers grow from there.
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