John Reeve, Chief Executive at Family Investments said: “By the time the Junior ISA launches in November, 700,000 children will have been born in Britain since the start of the year. Today’s announcement will increase the likelihood of every child having a financial asset when they turn eighteen.
“While the new product is an ISA in name, it has more in common with its predecessor the CTF. The Junior ISA allows parents, grandparents and anyone interested in a child’s future to make deposits over an eighteen year period which cannot be withdrawn. Parents value the protection that a product like this offers as there is no temptation to dip into these funds.
“The tax efficiency is an important incentive for parents, as anyone looking to set up a savings account for their child in recent months has faced difficult decisions on where to start. The £3,000 limit is a welcome extension on the current CTF limit but our experience indicates that the average family is only able to make modest contributions of around £20 to £30 a month which is well below the limit. As a result, the most important feature of the product is its universal availability and its simplicity. It is for this reason that we are pleased to hear that the Junior ISA will not require complex form filling when opening the product.”
“The most important feature of the product is its universal availability and its simplicity.”
Family Investments will offer Junior ISA from day one
Family Investments is already the UK’s favourite Child Trust Fund provider looking after the accounts of 1.2 million children. As a mutual with expertise in the children’s savings, the company believes the new Junior ISA will have more in common with the CTF than a traditional ISA and will use its knowledge to offer a product which meets the needs of new and existing customers.
Family Investments expects to offer a Junior ISA as soon as the scheme is launched. This is likely to be a stocks and shares option with a minimum regular premium of as low as £10 which will make it a savings vehicle open to all families.
John Reeve says: “Children’s savings should be thought of in the same terms as a pension, as a long-term savings commitment that is likely to benefit from exposure to the stock market, particularly in the current low interest rate environment.”
“We urge the Government to stick to its planned timetable for introducing the Junior ISA so that parents can begin saving as soon as possible.”
“Those people with children who already have a Child Trust Fund should continue to pay into these and we welcome the news that the Child Trust Fund limits will increase in line with Junior ISA.”
Family Investments has set up a pre-registration service for those people who wish to take out a Junior ISA when it launches. This can found on the website at www.family.co.uk
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Notes to journalists:
* According to HMRC