Family Investments, who have led the Child Trust Fund field, have welcomed the likely increase in investment limit for the Junior ISA, which is set to be £3000 a year.
The Junior ISA, which will replace the child trust fund, will be available to all children under the age of 18, who do not already hold a Child Trust Fund.
The HMRC have already announced that they expect six million children to qualify for the new product, which is set to be launched in the autumn.
With an additional 800,000 children likely to become eligible each year, the draft regulations for the product are expected with the Finance Bill, and will be discussed with consultants in the next few months.
The product is expected to be launched in November now, nearly a year after the final Child Trust Fund vouchers were handed out, and despite having no hand outs from the government, Family Investments welcome the new higher limit.
Family Investments Chief Executive, John Reeve said yesterday that the new product would ‘increase the likelihood of every child having a financial asset when they turn eighteen.’
“While the new product is an ISA in name, it has more in common with its predecessor the CTF. The Junior ISA allows parents, grandparents and anyone interest in a child’s future to make deposits over an eighteen year period which cannot be withdrawn.”
They also welcomed the products “universal availability and simplicity” which hasn’t been evident with the Child Trust Funds.
Child Trust Funds currently have a £1200 a year limit, although this is expected to be increased to move it in line with the new Junior ISA product.
Fidelity International also welcomed the product, arguing it will encourage youngsters to learn about saving, and the value of money.