As the new tax year looms, consider the Junior Isa for tax-free savings for those under 18. Fidelity highlights the power of compound interest, while the Financial Times prepares to demystify Isas in an upcoming webinar.
As the new tax year approaches in April, many are looking into options for saving for their children’s or grandchildren’s futures. One popular choice that emerges is the Junior Isa (Jisa), a tax-free savings vehicle for those under 18, capped annually at £9,000. According to Fidelity, consistent monthly deposits can accumulate significantly over time due to compound interest, potentially reaching around £18,000 by the time a child turns 18.
Fidelity International’s Emma-Lou Montgomery has also aimed to clarify common misunderstandings about children’s savings and investments. She notes that while children are subject to tax, it’s rare for them to earn enough to pay it. Additionally, children can have pensions that the government will contribute towards, and there are no tax implications for grandparents gifting money for these savings. It’s also pointed out that children with a Jisa can manage their accounts at 16 but can access the funds only at 18, thus underlining the importance of early financial education.
Moreover, the Financial Times announced it would be hosting a free webinar on March 14, led by consumer editor Claer Barrett, focused on maximizing Individual Savings Accounts (Isas). This educational event will cover various types of Isas, including stocks and shares Isas, Lifetime Isas for under-40s, and Junior Isas, providing expert advice right ahead of the UK Budget and the end of the tax year. Alongside Barrett, experts Moira O’Neill and Timi Merriman-Johnson will offer insights and practical tips on leveraging these tax-saving options effectively. This initiative aims to enhance individual financial literacy and facilitate informed investment decisions, highlighting the potential of Isas for fostering long-term financial stability. Attendees are encouraged to register in advance for the webinar via FT.com/Isaevent.
