MSE News: Junior Isas to be launched for children

john_s_2

karatemum wrote: »

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

Yes, the number is created when the child benefit claim is made although ordinarily it isn't issued till the child is 16 - except when a claim for DLA is made as outlined above. (I used to work in a benefits office.)

Hmmm... that's a thought. I wonder what will happen to that process when it's scrapped for higher rate taxpayers? Still, different subject entirely!

ILikeFreebies

I hope they don't impose the same restriction as CTFs whereby the child had sole control of the money when they reach 18. I've put money into CTFs, but not as much as I might have done. As nice as my children are now I don't want the money to be wasted when they get to 18 e.g. blow it on a drunken holiday somewhere.

Would anybody support a No.10 Downing Street petition to ensure parents have control what happens to the money at 18 for the Junior ISAs?

harz99

If existing CTF savings accounts are allowed to be wholly transfered in at the start of the Children's ISA, without limitation by any annual cap that is imposed, I think the proposal is a good thing.

However, like others here I think there should be some form of parental control at the maturity date.

Mikeyorks

ILikeFreebies wrote: »

As nice as my children are now I don't want the money to be wasted when they get to 18

Fully agree with that - having gone through the unpleasantness of mine blowing £10k in his first few months at Uni.

Would anybody support a No.10 Downing Street petition to ensure parents have control what happens to the money at 18 for the Junior ISAs

....... some things you don't do - as they stand no chance of success. And that's one of them. Whilst the proposal is still embryonic - you can't have it belonging to the child (to prevent parents shielding their own funds) throughout the ISA life - yet belonging to the parent at maturity. Fails all the tests - including common sense. If you want to keep the funds in your jurisdiction - and it's very sensible to do so - you need to do that virtually from the outset. Even using your own ISA if that fits the bill.

You can use simple trust accounts that keep it in the childs name eg Halifax Reg Saver - until 16. Therefore tax free via R85. But then move it back to your control at that point .......... which is where we made the costly error and failed to do so.

wornoutmumoftwo

I save in a junior bond for my two, set to mature when they reach 25. Reason I did it for this age is that I got mine from my parents at 21...and yes, it got wasted. I'm hoping they won't make the same mistake at 25.

NeilW

It's not good news at all. It's a trust fund that has to be managed by some financial organisation - for which they can charge. The system is just a rebranding of Trust Funds under a different name - much as PEPs were renamed ISAs.

A more appropriate piece of legislation would be to require that all bank accounts offered have to be available with a trust option - then that would be perfect for the disabled, the very elderly as well as children.

Couple this with a lifting of the £100 limit to something more sensible and the child's personal allowance handles the tax free bit.

More needless complication.

Milarky

If it become available to children under 16 (i.e. based strictly on current age rather than date of birth), that would include more eligible youngsters than CTFs did - since CTFs were only available to children born after 1 September 2002. Thus the 'oldest' CTF beneficiaries are currently only 8 - and children aged 9 to 16 are ouside the loop of 'tax free' savings.

"Any money saved will be owned by the child and they will not have access to it until they are 18."

If that age for 'maturity' sticks, what will happen to cash ISAs for 16 year-olds, allowed at present?

Milarky

57/10
26 October 2010

Financial Secretary to the Treasury, Mark Hoban, today announced that the Government will create a new tax-free children’s savings account. The new accounts, described as ‘Junior ISAs’, will offer parents a simple and tax free way to save for their child’s future.

So aren't technically 'Junior ISAs' they are simply being 'dubbed' such by unnamed Treasury types (note the press release's use of 'mock quotes')

Notes for editors

1. On 24 May the Government announced that it would reduce and then stop government contributions to the Child Trust Fund (CTF). This was part of a package of measures designed to make exchequer savings of £6.2 billion in 2010-11, to help tackle the UK’s unprecedented budget deficit. This will save £320million this year and over £500 million in each future year.


2. In July the Government made regulations to reduce payments at birth for children born from August 2010 to £50 (reduced from £250); or £100 (reduced from £500) if they are from a lower income family. The regulations also stopped all government payments at age 7 from August 2010.


3. The Savings Accounts and Health in Pregnancy Bill, introduced on 15 September, will stop all remaining government payments and end new eligibility for children born from January 2011.


4. Eligibility for the new account will be back dated, to ensure no child born after the end of CTF eligibility will miss out on the chance to have one of the accounts.

So it may be these new 'Junior ISAs' don't overlap the eligibility to CTFs - and children (under 16) currently not covered by CTFs won't be able to open one. Clarification will have to follow after months of consultations no doubt*


*Reminds me of that infamous 'Budget submission' 'clarification' of one D Cameron which came over a year after he said this and this

PasturesNew

ILikeFreebies wrote: »

I hope they don't impose the same restriction as CTFs whereby the child had sole control of the money when they reach 18. I've put money into CTFs, but not as much as I might have done. As nice as my children are now I don't want the money to be wasted when they get to 18 e.g. blow it on a drunken holiday somewhere.

Would anybody support a No.10 Downing Street petition to ensure parents have control what happens to the money at 18 for the Junior ISAs?

Just don't tell them the account exists ... until they're 40.

Primrose

Having watched a young relative blow her entire grandmother's legacy of £25K on retail therapy which she had intended should be used for a house deposit, I would endorse a rule that no child should know about, or be able to get their hands on money destined for them, until the age of 25. Hopefully by that age a few adult brain cells are starting to develop.