BANK ACCOUNTS
Final Regulations on Junior ISAs Published
Junior ISA’s have been given the green light by the government today and they will become available from the 1st November 2011.
The new tax free children’s’ savings account will replace the governments Child Trust Fund (CTF) scheme which gives tax free credits to children under the age of 18.
The new junior ISA will be available to UK resident children under the age of 18 who do not have a CTF.
Cash and stock shares for Junior ISAs will be available and children will be able to hold one cash and one stock shares Junior ISA at the same time.
The limit across both accounts will be up to £3,600 a year.
Parents will be pleased to know that the ISA will be locked until the child turns 18, however children will have the right to manage the account from the age of 16. But until then the parents will manage the account.
It will not be possible however to transfer any CTFs into Junior ISAs or vice versa.
Withdrawals from Junior ISA accounts would not be permitted until the child holding the account reaches 18, except in cases of terminal illness or death of the account holder.
"With Junior ISAs using the same framework as ISAs (qualifying investments for cash and stocks and shares Junior ISAs will be the same as for existing ISAs) this should enable providers to make a range of different products available” said Oliver Roylance-Smith, Head of savings and investments at Fair Investment Company.
“Junior ISAs provide a welcome extension of this tax benefit, specifically for a child's future. We urge the industry to create an attractive range of products to help encourage the widest possible number of people to save for their children."
If you’re interested in managing your finances more effectively, compare ISA accounts.
Tags: Child Trust Fund, isa limits, junior ISA