Policy paper

Increasing the Junior Individual Savings Account subscription limit for 2019 to 2020

Published 22 February 2019

Who is likely to be affected

Children with a Junior Individual Savings Account (ISA).

Banks, building societies and other financial institutions who offer Junior ISAs.

General description of the measure

The measure increases the amount that can be saved annually into a Junior ISA from £4,260 to £4,368 from 6 April 2019. Interest and gains received on money saved in an ISA is tax-free.

Policy objective

The measure supports savings for children.

Background to the measure

At Autumn Budget 2018, the government announced that the annual subscription limit for Junior ISAs would increase to £4,368 from 6 April 2019.

Around 907,000 Junior ISAs received subscriptions in 2017 to 2018.

Detailed proposal

Operative date

The measure will have effect from 6 April 2019.

Current law

The account rules for ISA and Junior ISAs are set out in the ISA Regulations 1998 (SI 1998/1870) (ISA Regulations), which are made under powers in the:

  • Income Tax (Trading and Other Income) Act 2005
  • Taxation of Chargeable Gains Act 1992

The ISA Regulations set out the annual subscription limit for Junior ISA.

Proposed revisions

The ISA Regulations will be amended by the ISA (Amendment) Regulations 2019 to increase the amount that can be paid into a Junior ISA each year from £4,260 to £4,368.

Summary of impacts

Exchequer impact (£m)

2018 to 2019 2019 to 2020 2020 to 2021 2021 to 2022 2022 to 2023 2023 to 2024
- negligible negligible negligible negligible negligible

The measure is expected to have a negligible impact on the Exchequer.

Economic impact

The measure is not expected to have any significant economic impacts.

Impact on individuals, households and families

The measure will increase the amount that can be saved into a Junior ISA.

The measure is not expected to impact on family formation, stability or breakdown.

Equalities impacts

It is not anticipated that the measure will impact adversely on any groups with protected characteristics.

Impact on business including civil society organisations

This measure is expected to have a negligible impact on ISA providers. One off costs include familiarisation with the new limit and adjusting their accounting systems to take account of the new Junior ISA subscription limit from 6 April 2019. It is not expected that there will be any on-going costs. There is no impact on civil society organisations.

Operational impact (£m) (HMRC or other)

The overall additional costs for HMRC in implementing these changes are anticipated to be negligible.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

This measure will be kept under review through communication with affected taxpayer and provider groups.

Further advice

If you have any questions about this change, contact Tim Roscamp on telephone: 03000 512336, or email: savings.audit@hmrc.gsi.gov.uk.

Declaration

John Glen MP, Economic Secretary to the Treasury has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.