Parents anxious to open a savings account for their their children will be gratified to know that the government has recently announced the launch of a junior ISA in 1 November of this year.
Treasury financial secretary Mark Hoban revealed the new ISA draft regulations intended to replace the recently scrapped child trust fund. The new financial product will permit approximately six million young Brits to benefit from tax-free savings as soon as it is made available seven months from now.
The annual contribution limit on these junior ISAs has been set at £3,000 and will be offered by all building societies and banks that provide standard ISA savings accounts.
Also the Fareham MP, Mr Hoban stated that the new savings offering is a prime example of a simple financial product free of any complex banking jargon that will enable families to invest in their childrens’ futures by saving.
The announcement comes on the heels of a recent announcement warning Brits to steer clear of making mistakes on their own ISA applications as the 6 April deadline looms closer.
F&C Investments corporate affairs head Jason Hollands warned people to take their time and not rush in the final days before the deadline in order to avoid common last-minute mistakes.
Noting that it is all to easy to incorrectly fill in forms, Mr Hollands stated that there are several different ways people can properly select an ISA and avoid any possible pitfalls.
Investors need to ensure they know their National Insurance number, the industry expert said. They also must ensure that any cheque payments must be drawn from the applicant’s account.
Spain-based banking giant Santander also issued similar advice to savers recently, urging Brits to ensure they don’t miss out the 2010-2011 financial year’s tax breaks.