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Give JISAs university fee incentive: Brewin

Give JISAs university fee incentive: Brewin

Junior Isas (Jisas) should be given more tax incentives to help young people pay higher education fees, Rob Burgeman, investment manager at Brewin Dolphin, has said.

In the March Budget, the government pledged to provide a 25 per cent uplift to the money that first-time homebuyers saved into the proposed Help to Buy Isa (Bisa) up to a fixed limit.

However, Mr Burgeman said the new government should extend the same type of incentive to Jisas, provided that funds saved into them were used to pay for higher education fees.

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Mr Burgeman said tuition fees were £9,000 a year, and students who lived away from their parents would also incur significant general living expenses. He added that the risk was this situation would act as a disincentive to some talented young people to enter higher education.

Mr Burgeman said: “We believe extending the 25 per cent uplift incentive that is already built into the Bisa to Jisas used to fund higher education, would reduce the burden of long-term debt that graduates must carry when they enter the workforce. This will bring an obvious benefit to them, but will also contribute to the quality of the UK’s workforce and the long-term health of its economy.”

The government allowed the transfer of Child Trust Funds to Jisas in late 2014. It is estimated that at the beginning of 2015 there were six million CTF accounts in the UK, holding up to £9bn in savings.

Adviser view:

Lee Goggin, co-founder of online advisory site findawealthmanager.com, said: “Parents need to ensure that Junior Isas, like their own, are optimised. Leaving funds languishing at poor cash rates is to be avoided, but even if clients already have a stocks and shares account, they should think about how it has performed.”