Increased limit to Junior ISAs

THE Manchester based Children's ISA has welcomed the announcement by the Treasury that the limit of annual investment into the Junior ISA has been raised from £3,000 to £3,600. The new tax free savings scheme for children will be available for parents to open from 1 November 2011.

David Dawson, savings director, the Children’s ISA said: “The announcement means that parents and grandparents can now confidently look to start saving for their children’s future, which we know is very important to them. We’re delighted the Treasury has taken on board one of our campaigning suggestions to increase the threshold”.

“The Children’s ISA is a simple and flexible Junior ISA with the backing of some of the largest asset managers in UK including Total Clarity Funds, Prudential and Scottish Widows.”

Here’s the latest information about Junior ISAs:

• Up to £3600 can be invested each tax year into the Junior ISA products which will be indexed by Consumer Price Index (CPI) from 6 April 2013 onwards.

• Each child is limited to one cash ISA and stocks and shares ISA.

• Any parent or guardian can open it and anyone can make contributions to it. Management passes to the child when they reach 16 but they can only access fund when they turn 18 when it becomes an adult ISA.

• There is no government contribution to the Children’s ISA.

• Any UK resident child under 18, who is not eligible for a Child Trust Fund (CTF), is eligible for a Children’s ISA. This includes children who were born before the CTF eligibility in September 2002.

• A child born between September 1, 2002 and January 2, 2011 was eligible for the CTF, at this time, if a child has a CTF they cannot have a Junior ISA.

The Children’s ISA is offering, to use their strapline, 'Cautious, Balanced and Adventurous' options that will include low cost, actively managed, ethical and sharia funds and you can open a Children’s ISA with a minimum investment of £10.

David said: “You can pay in up to £3600 per tax year in our Children’s ISA and calculations show that a parent who saves the full allowance each year could achieve a pot of almost £115,000 by the time the child is 18 (based on growth of 5% net per annum).”

Applications can be submitted online or by post. The ISA is operated by Avalon Investment Services who administer £300m invested primarily through Independent Financial Advisers.

Prudential has been announced as the Fund Managers in charge of delivering the active managed options through their diverse range of Pru Dynamic Portfolios. The low cost option will be run by Total Clarity Funds, a fresh fund house with a passion for more transparent and lower charging funds.

For more information visit the website on www.thechildrensisa.com