Junior ISAs celebrate their 1st Birthday

November 22, 2012 | Posted by Michael Bailey

It’s true to say that the Junior ISA market has got off to a slow start, partly because the rules were finalised quite late in the day, so many companies were not ready to offer accounts at inception, but have since launched them. Junior ISAs have also had low public awareness: unlike the Child Trust Fund, the launch of Junior ISAs did not receive waves of taxpayer-funded advertising.

Despite this, the Junior ISA market now offers lots of choice and these should be planted firmly on the radar of parents whose children do not already have a Child Trust Fund (you cannot have both). They are an attractive way to save for children as they enable parents and grandparents to invest in a wide range of funds, stocks and shares and cash to build up a pot of money that will legally pass to the child at 18 when they automatically convert into an adult ISA.

When you consider the fact that it is estimated that the costs of a three year degree course could now run to around £50k, as well as the hefty deposits now required to get your foot on the property ladder, it’s really important to start saving for your children’s futures as soon as you can.

You can invest up to £3,600 a year in a Junior ISA, or £300 a month, and – just like an adult ISA – there is no tax on any income or gains. For those able to invest the full amount, that means tucking away a maximum of £64,800 over 18-years.

Please do not hesitate to contact our team if this is something you would like to consider.

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