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Junior ISAs are go

With kids needing to scrape together every last penny in order to afford a university education, the Junior ISA you might expect to have been welcomed with open arms. But many see it as like a child trust fund only not as good, given that there’s no longer a government contribution involved.

But a sudden streak of generosity seems to have taken hold of the government, which has announced new and improved terms for the tax-efficient savings scheme.

The Junior ISA offers a measure of tax free investment for those who do not qualify for a trust fund. They can be either be invested in cash accounts or invested in stocks and shares. The original plan was to allow £3,000 to be invested each year with reduced tax each year. But now the plan is to allow £3,600 a year to be invested.

But really, the big question is whether it is worth all the fuss. Children already have a tax free allowance, and can make interest of £7,475 before they are taxed on it. To be at this kind of level you’d need quite a significant income from investments. And how many kids have that?

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