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Isa's for children

(9 Posts)
tranquilitygardens Fri 21-Oct-11 23:04:37

I am sure I read somewhere about new ISA's for children coming soon.

Does anyone know anything about them?

StuckUpTheFarawayTree Fri 21-Oct-11 23:06:41

It doesn't make sense to have them for children as they are a tax free savings account children don't pay tax on savings so they wouldn't need one, surely?

tranquilitygardens Fri 21-Oct-11 23:11:56

I saw something about these new ISA's for children, I really wish I had read it now.

I was thinking of starting a savings account for them to help with the massive uni fee's they are going to face, if they attend.

I have a small regular amount going into a savings account they have each, and they can access with a cash card, to teach them responsibility looking after their own money.

I would like an account they can't access yet.

I am also going to be in a position soon, fingers crossed to have a little lump sum for myself and would like to put some of that away for the children in a savings account and thought I would open up this new ISA for them for a lump sum and a small regular amount to go into it.

theyoungvisiter Fri 21-Oct-11 23:17:15

I agree with Faraway - the whole thing about ISAs are that they are a tax-free savings account.

Unless your children are in a position to pay tax (unlikely?) then what's the point? You'd be better off with a normal account which doesn't limit what you can invest.

However by googling the words "Children's isa" I've discovered they do indeed exist and there is a vast amount of information on the web including this Guardian article. www.guardian.co.uk/money/2010/oct/26/junior-isa-childrens-savings-account

CogitoErgoSometimes Sat 22-Oct-11 08:20:55

Cash ISAs are a tax-free savings accounts but the Junior ISAs are Stocks and Shares ISAs see here for an overview. Cash deposit accounts are making 3%-ish at the moment. Stocks and Shares are riskier in financial terms, but offer the potential over the long-term (10 years +) to significantly outperform cash deposit accounts.

When looking at Junior ISAs the main point of comparison are the fees charged to administer the accounts.

CogitoErgoSometimes Sat 22-Oct-11 08:25:11

Brief description from the website linked above....

Our Junior ISA will:
- Invest in Stocks and Shares.
- Be available to children under the age of 16 who were not eligible for a Child Trust Fund.
- Offer an ethical fund option.
- Include an Annual Management Charge of 1.5%.

yeahyeahitsallmyfault Sat 22-Oct-11 13:46:41

Just so people are aware; if parents pay money into an account for children, if the income exceeds £100 per annum it is regarded as the parents income and taxed at the highest marginal rate. This is why junior ISA's have been introduced - £3600 per annum outside of this rule.
Children also have a tax allowance the same as anyone.

tranquilitygardens Sun 23-Oct-11 16:17:33

My children are too old for a Child Trust Fund.

Wow only a hundre pounds a year, I will look into these isa's then!

thanks

bemybebe Sun 23-Oct-11 16:22:02

I would also check index-linked options like NSandI (not available until further notice) and PostOffice, which pay RPI+something... if you want to save for years to come , ie no problem with being locked away.

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