15 April 2011

Junior ISAs

Junior ISAs are not quite with us yet (legislation expected later in 2011), but they look like being a worthy replacement to Child Trust Funds. The big difference, though, is that the Government will not be making any contributions!

The limit looks like being £3,000 per year (which of course could be contributed by other family members). A sizeable pot could be built up by the time the child is 18 - perhaps even £80,000. And therein lies one danger - or some would think so. What is an 18-year old going to do with £80,000? Invest it sensibly, spend it wisely, or something else?!

Sounds like a good opportunity for some trust-based financial planning instead, perhaps limiting access for a few more years.

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