MSE News: Junior Isas to be launched for children

This is the discussion thread for the following MSE News Story:
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  • Reaper
    Reaper Posts: 7,279 Forumite
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    That is good news (assuming the £100 interest rule will not apply to them).

    However there is no need to confuse things by introducing a Junior ISA with different rules. Just reduce the minimum age limit for existing ISAs down to 0.
  • john_s_2
    john_s_2 Posts: 698 Forumite
    edited 26 October 2010 at 7:55PM
    Reaper wrote: »
    there is no need to confuse things by introducing a Junior ISA with different rules. Just reduce the minimum age limit for existing ISAs down to 0.

    Agreed. I presume there's a reason why they haven't. It would be useful to know what it is. I mean, it wouldn't cost much to remove the age restriction. Anything else will cost more money and I'm sure I read somewhere that the Government is cutting back at the moment.

    EDIT:

    Although (more seriously) I suppose the annual cap might be very different to £7200 (or whatever ISAs are at the moment). And the restriction on withdrawals till the age of 18 adds a further complication.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
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    Hm thing is, if this comes in, I can see adults using their children's tax allowance for their benefit (so if children get the same allowance, adults could abuse this and double their allowance by using their childs), rather than the childs.
  • xrjtg
    xrjtg Posts: 600 Forumite
    It sounds far more like a CTF than an ISA to me, although we are of course at the "vapour" stage.

    Reducing the age limit on ISA accounts doesn't achieve the same effect because the lack of withdrawal restrictions leaves them open to abuse as Lokolo has suggested.
  • dunstonh
    dunstonh Posts: 116,252 Forumite
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    I presume there's a reason why they haven't.
    Guessing here but it could be that you dont get your NI number until you are 16. ISAs are logged under your NI number. So, there needs to be a different mechanism in place to make sure that people cant abuse it by "inventing" children.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LilacPixie
    LilacPixie Posts: 8,052 Forumite
    Well I welcome the move. I'm due in Feb and I was hoping that there would be something in place for us to save for this babies future like in the way we currently save for our older children.
    MF aim 10th December 2020 :j:eek:
    MFW 2012 no86 OP 0/2000 :D
  • Mikeyorks
    Mikeyorks Posts: 10,369 Forumite
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    edited 26 October 2010 at 9:12PM
    The reason they don't fit to a junior version of the mainstream ISA is surely this aspect
    Any money saved will be owned by the child and they will not have access to it until they are 18

    ie once opened they cannot be closed (also confirmed on the 'news' an hour ago).

    http://www.bbc.co.uk/news/business-11630458
    If you want to test the depth of the water .........don't use both feet !
  • dunstonh wrote: »
    Guessing here but it could be that you dont get your NI number until you are 16. ISAs are logged under your NI number. So, there needs to be a different mechanism in place to make sure that people cant abuse it by "inventing" children.

    You can get an NI number before the age of 16 (my son had his since age 5 as he gets disability living allowance).

    Will Junior ISAs really help? Don't children get tax free savings up to personal allowance anyway if you fill in the correct form (can't remember the form number) and hand it in to the bank?
  • jimjames
    jimjames Posts: 17,580 Forumite
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    karatemum wrote: »
    Will Junior ISAs really help? Don't children get tax free savings up to personal allowance anyway if you fill in the correct form (can't remember the form number) and hand it in to the bank?

    Not if the savings are given to them by parents. Then its max £100 income that they can earn before parents are liable for tax on it. This would seem to fix that situation.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Mikeyorks
    Mikeyorks Posts: 10,369 Forumite
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    karatemum wrote: »
    Don't children get tax free savings up to personal allowance anyway

    ........ not if contributions from parents generate interest of £100 or more. Otherwise (some) parents would simply shield their own funds under this additional allowance. Hence the 'lock in' on the new proposal - otherwise the same could happen?
    If you want to test the depth of the water .........don't use both feet !
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