Parents will be able to open a Junior ISA account for their children from today at a range of high street institutions, Financial Secretary to the Treasury Mark Hoban has confirmed. Around six million children will immediately be eligible for a Junior ISA, with a further 800,000 children benefitting 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.
Mr Hoban confirmed that the limit for Junior ISAs would be set at £3,600. To ensure that children with a CTF are not disadvantaged he also confirmed that, from today, the CTF savings limit will treble from £1,200 to £3,600, aligning it with the new Junior ISA limit.
Funds in a Junior ISA will be locked-in until age 18 and roll over into an adult ISA on maturity, meaning that the accounts will help to foster a long-term savings habit among young people.
Mark Hoban said:
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. This, together with changes made to Child Trust Funds, mean that parents can save up to £3,600 per year for their child.
Notes for editors
In October 2010 the Financial Secretary announced that the Government would create a new tax-free children’s savings account, or ‘Junior ISAs’. The original press notice can be found here: Financial Secretary to the Treasury announces new tax-free savings account for children
In March 2011, Mr Hoban set out further proposals for consultation on the Government’s plans for Junior ISAs. This consultation closed in May 2011. Further information can be found here: Financial Secretary sets out details for Junior ISAs
Junior ISAs will be available from 1 November 2011. Children will be able to have one cash and one stocks and shares Junior ISA at any time, with an overarching annual contribution limit of £3,600. This is an increase from the previously proposed limit of £3,000.
Junior ISAs will be offered by high-street banks, building societies, and any other providers that currently offer standard ISAs and CTF accounts.
Funds in Junior ISAs will be ‘locked in’ until the child is 18, and the accounts will then, by default, become adult ISAs.
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