Junior ISA limit increased
When Junior ISAs are introduced on 1st November, a new annual investment limit of £3,600 in cash or stocks and shares will apply until 5th April 2013. After that, the limit will be updated each year, based on the Consumer Prices Index.
Any child under the age of 18 who does not already have a Child Trust Fund (CTF) will be eligible to open a Junior ISA, with the accounts being provided by high street banks, building societies and investment firms.
Contributions to the accounts, up to the new limit, can be made by anyone, including the child themselves, as well as their parents, family and friends. The funds generated will belong to the child, although the money will be locked in until they reach the age of 18, when the account will automatically become an adult ISA.
However, children who already have a CTF will not be able to exchange this for a Junior ISA. While the investment limit for CTFs will also be £3,600 from November, this move has provoked concerns that their growth will be hampered by providers focusing on the Junior ISA market instead.
