ISA: Benefits of long term saving shown as ‘My Money Week’ initiative calls for engagement


ISAs are a great long term asset for financial planning. The accounts provide numerous tax benefits and if people utilise them early enough, it can provide comfort throughout a person’s working life.

ISAs can have up to £20,000 put into them for the current tax year and the money held within them is shielded from income and capital gains tax. Currently there are four main types of ISAs including cash, stocks and shares, innovative finance and lifetimes ISAs.

There are also Junior ISAs which can provide a foundation for children to be utilised in later life.

For the current tax year, a total of £9,000 can be put into a Junior ISA.

The ISA in question must be for a child who is under 18 and is living in the UK.

These type of ISAs are a perfect option for those looking to mark “My Money Week”, a UK wide initiative aimed at helping children and their families understand the long term benefits of money management.

In correlation with My Money Week, Foresters Friendly Society shared tips on how families can embrace financial planning, with one of the tips championing the importance of Junior ISAs.

They detailed that opening a Junior ISA is a great start for engaging children in what money is, and the benefits of saving.

They went on to highlight that an important element of effective savings includes putting money away little and often.

Encouraging this behaviour with the children involved will provide real long term dividends.

It is relatively easy to open a Junior ISA account but there are certain decisions that need to be made before doing so.

To open an account, a parent or guardian will need to:

  • Choose the specific type of Junior ISA they want for their child – cash, stocks and shares or a combination of both
  • Choose a preferred account provider
  • Receive and complete the application forms from said provider

A Junior ISA can only be set up for young children but once the child in question becomes older than 16 they can become the registered contact for the account.

When they eventually turn 18 they will be able to make withdrawals from the account, which will also automatically become an adult ISA.

The registered contact on the account, whether it be a parent or the teenager involved, will be the only person who can make operational decisions for it.

As an example, if the account is a cash ISA but the family involved want to move it to a stocks and shares one, only the registered contact can authorise the change.

Junior ISAs were introduced to replace Child Trust Funds (CTF)

These type of accounts can no longer be opened but for people who still hold them, it is possible to transfer funds from CTFs to Junior ISAs.

It should also be noted that if the child moves abroad, money can still be added to their account.

If Junior ISAs are utilised to their highest potential they could really generate some sizable sums by the time the child turns 18.

If the current limit of £9,000 stays in place, more than £100,000 could be put away for a child.


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