Junior Isa savings option for children launched today
Tuesday, 01 November 2011 02:44
Parents will be able to open a Junior Isa account for their kids from today (November 1st), the Treasury has confirmed.
All children under 18 who are UK residents and do not have a Child Trust Fund (CTF) will be eligible for one of these products.
That means around six million can get one in the coming year, with a further 800,000 children benefitting each year thereafter.
Each Junior Isa will be limited to £3,600 and, to ensure that children with a CTF are not disadvantaged, the limit on the latter is also rising from £1,200 to the same figure.
Financial Secretary to the Treasury Mark Hoban commented: "The launch of Junior Isas is a clear demonstration of the government's commitment to encourage saving for children."
Meanwhie, Brian Morris, head of savings policy at the Building Societies Association, described the new product as a "welcome addition" to the savings marketplace.
He continued: "The flexibility to transfer money in both directions between cash and stocks and shares accounts is welcome. This is not the case for adult Isas and we'd urge the Chancellor to address this inconsistency in his Autumn Statement."
Kevin Mountford, head of banking at MoneySupermarket, said these Isas could be a " vital tool" for tax-efficient savers.
"There has never been a more important time for parents to start planning for their child's future. With the increased cost of living and rise in university tuition fees, the earlier parents put their savings plan into action, the better start they can give to their children," he added.
Use the Myfinances.co.uk comparison tables to find the best deal on a junior ISA
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