While the royal family may not have to worry about setting funds aside for the new fifth heir to the throne to secure his future, the rest of us may consider setting up a junior ISA to save for a child's university fees, first home or other long-term goal.
However, new research from Old Mutual Wealth shows that the majority of parents are worried about their child gaining control at the age of 18. Specifically, 52% are uncomfortable with the idea of their child getting access to a large sum of money, while 17% feel unsure about it.
With Old Mutual Wealth's figures showing that investing the maximum every year (£4,260 in the current tax year) into a stocks & shares junior ISA (JISA) could see £150,000 in such an account after 18 years, it's no surprise that parents may feel reluctant. Indeed, the survey found that parents wouldn't want their kids to have control of more than £10,000.
If you're not comfortable with handing control over to your child at the age of 18, when their junior ISA would become a regular adult ISA, you could focus on maximising your own ISA allowance. By saving for your child in an ISA under your name, you'd be able to control when you gift your child money from it – or even use the funds to pay their university fees yourself, for instance.
Note that there will be tax implications with gifting your child more than £3,000 per year, unless it's for their wedding (which currently has a £5,000 limit). Another drawback when it comes to saving in an adult ISA versus a junior ISA is that the latter currently offer higher rates. To have a chance at competing with the current best cash junior ISA rates, you'd likely have to invest in a stocks & shares ISA, which comes with its own risks.
Of course, rates will certainly change over the next 18 years, while the royal baby (and maybe yours) grows into a royal adult. That's why it's important to keep an eye on both junior and adult ISA rates, to ensure you're getting the best deal for you and your child.
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