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Will the ‘New ISA’ (NISA) affect my child’s Junior ISA?


There’s a good chance you might have heard the big news a couple of months ago about how the UK’s most popular tax-exempt savings plan, the ISA (Individual Savings Account), is going to replaced by the new and easier to understand savings plan, the ‘New ISA’ (more commonly referred to as the ‘NISA’).

If you didn’t hear this news then not to worry, as you can read all about it in our previous blog: The NISA explained, for a more detailed explanation about what it is and how you can actually benefit from it.

After the Chancellor announced the changes in his 2014 Budget speech, the media generally praised the ‘NISA’ because it offers savers flexibility and the opportunity to shelter more money from the taxman than the regular ISA (An extra £3,120 this tax year to be exact!).

However, not many people in the media have spoken about how this will affect the ‘Junior ISA’, the child friendly version of the ISA. Many people have been asking the question “Will the introduction of the NISA affect how I can save for my child?”

Well, the short answer is no – This is because:

1. The child version of the ISA, the Junior ISA will remain largely unaffected
2. You’ll still be able to use a Junior ISA to save up a tax-free lump sum for your child to receive on their 18th birthday.

Whilst this was neither particularly good or bad news, and probably the reason it didn’t gather much media attention, there was some good news for those saving for their children’s futures.

This good news is that:

1. From the 1st of July 2014 you’ll be able to save even more than you could before with a Junior ISA
2. The Junior ISA savings allowance for the 2014/15 tax year originally allowed you to shelter £3,840 from the taxman
3. This tax-exempt savings allowance will now increase to £4,000

Can I take advantage of this?

Yes, of course! But you’ll have to wait until the 1st of July, when the savings allowance will increase to £4,000. All you have to do is contact your Junior ISA provider on, or after the 1st of July 2014 and deposit the extra cash. It really is as easy as that, you’ll have successfully saved a little extra away for your child’s future at the same time as protecting the money from the taxman!

But, I don’t have a Junior ISA for my child – Can I get one?

If you have a child under the age of 18 who is a UK resident and doesn’t have a CTF (Child Trust Fund), then getting a Junior ISA for your child is really quite simple (and don’t forget, if you have more than one child then they’re all eligible for their own Junior ISA!).

Whilst you can open a Junior ISA simply by contacting the individual Junior ISA provider, it’s always a good idea to seek professional financial advice before making any major decisions. This is because an expert financial adviser will be able to scour the market looking for the best Junior ISA to suit your child’s individual needs, therefore helping them get the most out of the money you save for them.

Need Financial Advice?

If you’re not sure you’re getting the most from your current Junior ISA for your child, or you haven’t set one up, then contact one of our expert financial advisers by asking a question online or by calling us on 0800 092 1245.

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