Children’s Savings Getting To Grips With The Junior ISA

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The Coalition Government made a bold and somewhat radical move on November 1st 2011 when they launched their new product called the Junior ISA (JISA). The story behind this new account started back in 2010 during the May budget, where it was revealed the previous Government backed product the Child Trust Fund (CTF) was to come to an end.

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Children’s Savings: Getting To Grips With The Junior ISA: 

Children’s Savings: Getting To Grips With The Junior ISA

PowerPoint Presentation: 

The Coalition Government made a bold and somewhat radical move on November 1 st 2011 when they launched their new product called the Junior ISA (JISA). The story behind this new account started back in 2010 during the May budget, where it was revealed the previous Government backed product the Child Trust Fund (CTF) was to come to an end.

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Six million children eligible There are currently six million children eligible for the JISA and it is expected that atleast 20% of them will have a JISA to their name.

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The JISA has taken the lead role in the current interest towards children’s savings, it offers simplified saving that is accessible to almost everyone, the government will not contribute into it like it did with the CTF but figures showed that even after receiving a contribution from the Government saving was not pursued.

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When a JISA is opened on behalf of any child the responsibility falls on the account opener and any close family and friends to save. The introduction of the Junior ISA was also part of the Coalition Government’s plans to reduce the cost in all areas and the CTF fell to the Government’s axe because it came with a big financial burden.

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Since its launch the market for Junior ISAs has heated up, after what was a relatively quite launch. With a handful of providers making their product available on launch day, there was a definite if small fight to catch the early interest. Hargreaves Lansdown who had a product ready, launched their JISA seconds after midnight on the 1 st of November.

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The Junior ISA is an account that offers parents and guardians alike the chance to save up to £3,600 per month for each child, this amount will be fixed until 2014 after which it will be adjusted each year. The account also comes in two forms, ‘cash’ and ‘stocks and shares’.

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Risk preference Investors can choose the account that will suit their risk preference, this means that for the less risky investor who is looking for guaranteed returns the cash option is the one out of the two that should be considered and for the investor that is does not mind the extra risk for a chance of a higher return it goes without saying that the stock market linked option should be considered.

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Before making any decision regarding the account you prefer or even a provider, it is good practice to talk to a financial advisor who can alert you to issues you may miss and also enlighten you to other accounts you may be better suited too. http://www.comparejuniorisa.com