Junior ISAs: the lowdown
Junior ISAs are being introduced this autumn with the aim of encouraging families to start saving for their children from an early age, so how do they work and what are the rules?
Junior ISAs or JISAs are finally set to launch on 1 November so here's the full lowdown to all you need to know.
They're available to anyone born on or after 3 January 2011. Under-18s who don't already have a child trust fund can also open one.
Both cash and stocks and shares ISAs will be available and each tax year it's possible to transfer to different ISAs. Unlike regular ISAs you can't hold JISAs with different providers – even from previous tax years. One way around this would be to choose a stocks and shares JISA with access to fund supermarkets. That way you can still invest with different providers.
Children won't be able to access the money until they turn 18. After that they can either withdraw the money or it will default to a normal ISA.
When the child is 16 they also have the option of taking out regular adult cash ISAs on top of their JISA.
The maximum annual allowance is £3,600 and monthly contributions could be as little as £10.
Unlike its predecessor the child trust fund, there are no government top ups to the JISA.
But the advantage is that it encourages families to start saving for their children from a young age which is nothing to be sniffed at.
And the figures speak for themselves: if you were able to invest the full £3,600 every year from when your child is born until they turn 18, the total ISA pot could be worth just over £100,000.
Contact providers directly to apply to their JISAs and before filling in the form look at all the options just as you'd compare different accounts for terms and rates.