Parents can open Junior ISAs from today - Savings - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Parents can open Junior ISAs from today

Parents can open Junior ISAs from today

Category: Savings

Updated: 01/11/2011
First Published: 01/11/2011

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 It is now over 6 months old so the content may be out of date.

Today marks the first opportunity for parents to open Junior ISAs for their children.

Around six million children will be eligible for the new accounts, with around 800,000 children benefiting each following year.

All children under 18 who are UK residents and do not have a Child Trust Fund (CTF) will be eligible for a Junior ISA.

"The launch of Junior ISAs is a clear demonstration of the Government's commitment to encourage saving for children. Junior ISAs will be open to all parents, regardless of income," said Mark Hoban, Financial Secretary to the Treasury.

Children will be able to hold a cash ISA and stocks and shares ISA with a combined annual limit of £3,600.

Like their grown-up equivalents, the accounts will be sheltered from tax.

Children will be able to control their accounts from 16, but will not be able to access the funds for another two years.

The new accounts will effectively replace CTFs, although unlike them, the Government will not pay anything into Junior ISAs.

Limits for CTFs will also be increased from £1,200 to £3,600 a year to bring them into line with the new accounts, although CTF balances cannot be transferred into a Junior ISA.

However, Danny Cox of Hargreaves Lansdown said that the six million children in the UK with a CTF could potentially be left with inferior products.

"We think Child Trust Fund and Junior ISA rules should be aligned and then merged into one, just like PEPs and ISAs were," he added.

"We have taken this up with the Treasury."

All of the high street's biggest names are expected to launch their own versions of the Junior ISAs, so keep an eye on Moneyfacts.co.uk for the best of these new tax-efficient children's accounts.

Find the best savings rates for your child - Compare savings accounts

Download FREE Child Savings Plan brochures

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Just 44 savings accounts beat inflation

Inflation recorded another large jump during December, and predictably, this has had a devastating impact on the number of savings accounts that beat it, so much so that you’ll need to lock your money away if you want an inflation-beating return.

Just 47% have money in a savings account

We’re often told of the importance of saving, yet unfortunately, the message doesn’t always get through. Indeed, research shows that just 47% of those surveyed have money in a savings account, and 17% have no savings or investment whatsoever.

How much will you save this year?

Many of us have set savings goals for the year ahead, and planning to budget better and save more will be at the top of many financial resolution lists. But how much are you hoping to squirrel away? Encouragingly, many people have impressive targets.
 
Close