Junior ISAs launched - 01-12-2011

Junior ISAs launched

The new Junior ISAs designed to encourage children to save money were officially launched on 1 November 2011. The Junior ISAs will be welcomed by many parents following the phasing out of the Child Trust Funds (CTF) which ceased to be available to children born after 3 January 2011. However, the new savings accounts are run by private providers and the government will not contribute any public funds as was the case with the CTF. Junior ISAs will be offered by high-street banks, building societies, and any other providers that currently offer standard ISAs and CTF accounts.

The new account will have the following key features:

• All returns will be tax free.
• Funds placed in the account will be owned by the child and would be locked in until the child reaches 18 years of age.
• Investments will be available in cash or stocks and shares.
• Annual contributions will be capped at £3,600 per year.
• Junior ISA accounts will by default become adult ISAs on maturity.
• All UK resident children who do not have a CTF will be eligible for Junior ISAs.

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