Should you get your child a Jisa?

More details are emerging about the new junior individual savings accounts (Jisas), the replacements for the now-defunct child trust funds. Ruth Jackson looks at whether you should buy one for your child.

In anticipation of their November launch date, more details are emerging about the new junior individual savings accounts (Jisas). These are the replacements for the now-defunct child trust funds (CTFs). The government has announced that they will have an annual limit of £3,600, meaning you can deposit up to that amount into the account and you will pay no tax on the interest or capital growth. It has also been confirmed that both cash Jisas, and stocks and shares versions will be available and children will be able to hold one of each.

As with the CTF, the Jisa will be in the child's name and the money will be locked away until the child turns 18, when they will be able to get at the cash and the account will automatically convert into an adult Isa. From 1 November the accounts will be available to any child under 18 who was born on, or after 3 January 2011, or before September 2002 in effect any child who didn't qualify for a CTF. Anyone who already has a CTF will see their annual investment limit increased from £1,200 to £3,600 to bring them in line with Jisas. The government has also revealed a financial education element to the Jisas as children will be able to manage their own accounts from the age of 16, although they won't be able to get their hands on the money until they are 18. Hopefully that will encourage some children to take an interest in their own finances and perhaps be savvy enough by the time they get their hands on their money not to squander the lot.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.