Open up ‘JISA’ access, Government urged - Savings - News - Moneyfacts

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Open up ‘JISA’ access, Government urged

Open up ‘JISA’ access, Government urged

Category: Savings

Updated: 20/03/2012
First Published: 20/03/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The current restrictions on Junior ISA accounts should be lifted, the Government is being urged.

Currently parents whose children were given Child Trust Funds (CTF) between September 2002 and January 2011 are not permitted to open a Junior ISA.

And research by Which? found that children could miss out on more than £300 million in returns on savings over the next ten years due to Government rules that prevent transfers from CTFs into Junior ISAs.

There is also no facility that allows parents to transfer their child's CTF into a Junior ISA.

CTFs were phased out by the Government as part of its range of cost cutting measures, as parents were previously given a £50 voucher to invest for their children.

Junior ISAs receive no subsidy from the Government, with the onus on family and friends to fund the accounts.

But ahead of tomorrow's Budget, Lloyds TSB has called for the barriers facing parents who want to save into a Junior ISA instead of a CTF to be removed.

"Saving for a child's future is increasingly important as more and more young adults are becoming reliant on their parents to fund some of the most basic costs of living," said Greg Loughlan, head of savings for Lloyds TSB.

"The Junior ISA allows parents to set aside money throughout their child's life in a tax efficient way.

"However, in order for all parents to get the maximum choice of deals, the Government needs to urgently review its policy of restricting access to the Junior ISA for those that were eligible for a Child Trust Fund.

"We have been calling for this since February and urge change is seen sooner rather than later."

Recent research highlighted the impact that maximising Junior ISA savings could have on a young adult's life.

A parent maximising their Junior ISA allowance each year could earn up to an estimated £86,000 over an 18 year period.

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