Junior ISA’s…ISA’s for Children

 ISA's, Money saving for Children  No Responses »
Aug 012011
 

Junior ISAs are expected to be the new tax-free savings and investment accounts for children. Expected to launch in late-2011, Junior ISAs will replace Child Trust Funds. If you’re interested in saving for a child’s future, they could be a great option when they become available.

What is a Junior ISA?

The Junior ISA is a new tax efficient account designed for adults to save and invest on behalf of children.

Who is eligible for a Junior ISA?

Any child resident in the UK who wasn’t eligible for a Child Trust Fund (CTF):

  • Children born on or after 3rd January 2011
  • Under 18’s born before September 2002

Any child born between 1st September 2002 and 3rd January 2011 that didn’t qualify for a Child Trust Fund will also be eligible for a Junior ISA.

The Family Investments Junior ISA will only be available to children under the age of 16, who didn’t qualify for a CTF.

What are the main features of the Junior ISA?

  • The child enjoys an initial limit of £3,600 per year across both types of account
  • Proceeds of the account are held in the child’s name
  • Tax efficient like an adult ISA
  • Money in the account cannot be withdrawn by the parents as it is designed for the child’s future
  • The parent manages the account on the behalf of a child
  • At age 18 the account is converted into an adult ISA and the young adult can access their funds.

Are there different types of Junior ISA accounts available?

Yes. Like adult ISAs, there are two different types of Junior ISA:

  • A cash Junior ISA – which will earn interest like a savings account from a bank or building society
  • A stocks and shares Junior ISA – which will invest in stocks and shares

You can take out both a cash Junior ISA and a stocks and shares Junior ISA, with different providers (or the same provider if they offer different products), at the same time if you choose.

 Posted by admin at 4:39 pm  Tagged with: , ,

How do Isa’s work?

 Family Money Saving, ISA's  No Responses »
Feb 032011
 

 ISA is short for ‘Individual Savings Account’ . ISAs give you a way of investing in our unit trusts without you having to pay tax on the returns you make from the investment. Specifically, unlike other investments, you do not need to record your ISAs in your annual tax return.

Tax-free is the main selling point of ISAs because interest has to be paid on money saved in a traditional savings account, which can be at 20% for lower rate taxpayers or 40% for higher rate ones. 

A Cash ISA is a savings account held with a bank or building society. Interest is then paid on the amount saved and this interest is tax-free.

Currently, you cannot have both a mini and a maxi Isa. It is worth remembering, though, that while your money is safe in a bank or building society deposit, interest rates can fall.  

It is possible to earn around 6 per cent in a mini cash Isa , but it is worth remembering that mini cash Isa rates vary with the Bank of England (Base Rate) interest rate.

For this reason it may be worth locking into a fixed Isa, with one of the best one-year deals around pegs your rate at 6.4 per cent .

Investing in unit trusts through ISAs should be considered by someone with savings which can be put away for the medium to long term. Of course, the longer you can keep your investment, the greater the potential for better returns. But remember, your capital is not guaranteed and the value can go down as well as up.

 Posted by admin at 3:12 pm  Tagged with: , , ,

Cash Isa’s give above inflation returns

 ISA's  No Responses »
Feb 032011
 

Cash Isas – which are just like instant access bank or building society accounts but with no need to pay any tax on interest – can also be an effective short-term parking place for funds you may wish to invest in stock market-based funds at a later date.

Either option enables married couples to shelter a total of up to £14,000 between them, provided they act before midnight on April 5. Failing to act before then means foregoing a valuable tax break which, once lost, cannot be reclaimed.

Cash individual savings accounts (Isas) are an attractive option for people who prefer to have nothing to do with unpredictable stock markets.

There are investment strategies which can help weather the storm while protecting your tax break which, combined with pending changes to the Isa rules, should help you make money when conditions improve.

 Posted by admin at 2:51 pm  Tagged with: , ,
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