ISA for 17yr old?

DonkeyKong77

Hi
I think it is possible to get ISA's if you're 17, but the one's i am aware of ask for the person to be 18or over.

Is this a good idea for a 17yr old in education - will try and convince my sister if it is!

Also does anyone know of any ISA's that apply to under 18's? (found one: halifax fixed rate 1yr)

Thanks

ReportInvestor

Yes. You can get an ISA at 16.

This is a good idea because there is no guarantee that ISAs will survive after 2010. Get them while they're hot!

Kent Reliance Building Society do one at 16+ for a healthy 4.96% .

Amba_Gambla

under 18's and ppl in full time education don't pay tax anyway - surely you can find a better rate of interest than an ISA

ReportInvestor

But if you put it in an ISA it is likely to stay tax free for life.

How much is 1% worth (the tax free bit) on £3K over 70 years?

Around £3K.

Doubling your money is not to be sniffed at, even with inflation.

DonkeyKong77

I dont think current accounts are better than 5%, and again there are some restrictions on age/min deposits made each month etc - may be wrong though!

Joe_Bloggs

ISAs are very inflexible and more suited to tax payers who would other wise pay 20% up to 40% of the interest in tax according to taxable income.

If any person earns less that £4895 (April 2005/6) or will earn less than £5035 (April 2006/7) they would not pay tax on interest earned anyway. An R85 form will need to be filled in. That's eqivalent to £94-96 a week, 52 weeks a year or £1678 per month working three months a year.

Nationwide and Halifax allow mini-cash ISAs at 16.
A bit late now but the Nationwide have a 'smart account' that allows a cash card after age 11 with online access up to age 18. Before that access is a passbook.

Perhaps it would be educational for the person in question to research the best place to put their money. Monthly interest payments are more inspiring that dull yearly ones. There are also very tempting regular saver offers that appear to be 10%. There are lots of savings comparison sites to discover.

J_B.

toonfan

My 17 year old son with some persuasion it must be said, opened up an E-ISA with the Yorkshire BS paying 4.6% (if I remember rightly). I thought it was an "adult" type option. This was for some of his pocketmoney ( I standing order part of his allowance into it) Xmas money etc. Its online facility was one of the attractions; he wanted to be able to transfer to it from his Halifax online current account independently. Also it seemed of the few around the most unfussy "E" one to set up - and it was. We had to go to a branch to verify who he was etc but it wasnt hard and the staff were helpful
Nudging him down the ISA route helped him understand the tax angle (even though he wouldnt pay till 18). It was also about him taking responsibility for his money and make decisions about moving around to his best advantage the money he wants regular access to

ReportInvestor

Joe_Bloggs wrote:

ISAs are very inflexible and more suited to tax payers.

I am trying to suggest that these future taxpayers get as much as possible into a tax free savings scheme while they can eg before Gordon Brown or whoever reduces the £3K annual Cash ISA allowance to £1K in 2010.

IIRC the £3K annual allowance was due to go down to a miserly £1K annual allowance in 2004/5? but received a reprieve [for purely electoral considerations I assume].

It's "use it or lose it" between now and WEDNESDAY April 5th 2006

10% in a Barclays regular saver is nice - but how long will that last?

And tax free for life could mean interest that is 67% higher for many graduates in due course :j once they "graduate" to 40% tax.

Sillychuckie

under 18's and ppl in full time education don't pay tax anyway - surely you can find a better rate of interest than an ISA

Not quite true... it all depends on your earnings over the year. I am a full time student but earned over my £4895 limit just from part time work, or work in the tax year before starting my studies... (i.e. between April and Sept).
I am a final year uni student, with stupid amounts of university debt, yet the few pennies I do have in non-ISA accounts, pay full tax.

It is a complete pain that I can't send off an R85, as I only earned about £500 over... grr.

lipidicman

Remember, even if you had earned 'just under' then the interest payment could take you 'over' and mean you could not get the interest tax free

Chadsman

IIRC to open a cash ISA you need to be 16yrs or over, to open a shares ISA you need to be 18yrs or over.
IIRC the tax advantages of putting shares in an ISA have been significantly reduced compared to what they once were now that dividends have tax deducted. The major tax advantage of having shares in an ISA is that they are not liable to CGT (but also you cant offset any losses against other gains).
This is not advice!
I may or may not be correct :eek:
:beer: