InvestmentsNov 2 2015

Junior Isas need to be better advertised: adviser

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Junior Isas need to be better advertised: adviser

Speaking to FT Adviser, Juliet Schooling-Latter, head of research at Chelsea Financial Services said that while the Junior Isa is “significantly more popular than the child trust fund, more needs to be done to advertise them”.

Launched by the coalition government on 1 November 2011, the savings option was set up to act as an incentive for parents to save for their children’s future.

The Isa currently has a £4,080 savings limit with Junior Isas being available as a cash Isa or stocks and shares Isa.

Ms Latter added: ““While they are more popular (than CTFs), more still needs to be done to advertise them. We highlight the Junior Isa where we can but these things do take time to take off. While they are popular, there could still be much more uptake.

“Personally I invest in one and it is a great way to build a lump sum as the cost of university fees and first homes are high in the UK.”

Richard Stone, chief executive of The Share Centre, said: “For those serious about saving for their children, Junior Isas have an important role in developing financial capability in young people.

“Despite the current levels of uncertainty and volatility around the world, stock markets can still provide the best long term returns, which is particularly relevant when investing for young people.

“A modest amount invested regularly could provide a meaningful lump sum when a child reaches 18. It could give them the financial start, freedom and support at a time when they need it most.”

A parent can open a Junior Isa in their child’s name if they are under 18 and live in the UK.

While account holders are able to take control of their account at 16, they can not withdraw money until 18.

Last year, research revealed almost half of parents wrongly assumed all children could have a Junior Isa and 44 per cent either think there are no limits on how much can be paid into one each year or are not sure if there are any limits.

A survey by SavvyWoman of 1,357 parents showed that 37 per cent of parents did not know or are not sure whether all children or only certain children are allowed a Junior Isa.

lucinda.borrell@ft.com