What is a Junior ISA?
The Junior ISA will offer parents a new, tax-free way to save for their childâs future. However, unlike the Child Trust Fund account (which has been closed to children born on or after 3 January 2011), the government will not make any payments into the new accounts.
The new features of the Junior ISA are:
- children living in the UK who do not have a Child Trust Fund account will be able to have a Junior ISA
- people will be able to put money into a cash account or âstocks and sharesâ account
- each child will be able to have one cash and one âstocks and sharesâ Junior ISA at any one time
- there will be a total yearly limit of ÂŁ3000 for all payments into these accounts
- accounts will become ISAs when the child is 18
As with Child Trust Funds, the following will apply to Junior ISAs:
- the accounts will belong to the child and they are not able to get the money out until they are 18
- any money the accounts make will be tax free
- a range of banks, building societies, credit unions, friendly societies and stock brokers will offer Junior ISA accounts
When will Junior ISA be available?
The government is still finalising the rules for Junior ISAs and will publish these in the summer. The first new accounts are expected to be available in autumn 2011.
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