Lastweek marked the first anniversary of the Junior Isa (or Jisa) scheme the government's tax-free savings scheme for children. But, according to Stephen Womack on Thisismoney.co.uk, "fewer than half of parents know what a Jisa is", and a survey suggests that only one in 100 eligible families have used the scheme so far. The uptake is particularly low in households earning below £28,000.
The tax breaks are decent enough up to £3,600 per year can be invested in a cash or stocks and shares Jisa, or a mixture of the two, and from then on interest (in a cash account) and/or dividends and capital gains (in a stocks and shares account) are tax-free.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But the biggest drawback is that the money is controlled by the child, not the parent or grandparent, once they turn 18. Many parents may not want to take a gamble on their child's spending priorities, even when it's a tax-free one.
-
Is it time to ride the recovery in emerging markets?Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
