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Junior ISA limit expected to rise

Junior ISA limit expected to rise

Category: Savings

Updated: 20/07/2011
First Published: 20/07/2011

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The limit on the amount that can be paid into the Junior ISA is set to be raised to £3,600, it has been reported.

Next week the Government is expected to confirm a 20% rise in the amount that will be allowed to be saved into the accounts introduced to replace the scrapped Child Trust Fund (CTF).

Initial indications were that £3,000 would be allowed to be sheltered tax-free in Junior ISAs.

However, it has now been suggested that Mark Hoban, Financial Secretary to the Treasury, will shortly announce a change in the limit to £3,600.

Junior ISA accounts will become available from 1 November this year.

All children who do not have a CTF will be eligible for the accounts, which are expected to be offered by all high-street banks, building societies and other providers that offer standard ISAs.

Children will be able to have one cash and one stocks and shares Junior ISA at any time, as long as the combined annual contribution doesn't outstrip the contribution limit.

The reports suggest that from November, the annual limit for those children who have already been given a CTF will also rise to £3,600, aligning the limits for Junior ISAs and CTFs.

Funds saved in a Junior ISA will be locked in until the child reaches 18, at which point the account will become an adult ISA.

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