ISA Savings: Incentives for Helping the Poor

Savers could get help while helping disadvantaged children

Savers could get help while helping disadvantaged children

The government has announced that savers will be rewarded with money to contribute towards an Individual Savings Account if they invest in initiatives targeted at helping disadvantaged youth.

The money can be used towards regular or Junior ISAs, which are the government’s new children’s savings scheme that allows up to £3,600 of yearly tax-free contribution.

With the government’s new rewards, saving money in a Junior ISA can now help other children as well as accruing a nest egg for your child’s future.

As tuition at universities will be nearly 3 times more than it was, incentives to save are more important than ever in ensuring that young people have access to higher education.


The Prime Minister’s announcement came on the heels of a report written by Labour MP Graham Allen, which suggests that early intervention is the most effective way to help underprivileged youth turn their lives around.

Initiatives that steer children away from crime and substance abuse have been noted as particularly effective and necessary.

The report was endorsed by Prime Minister David Cameron, who said that investing in the causes of social failure are paramount in breaking the cycles of poverty, crime, and other issues facing disadvantaged British youth.

The government hopes that the reduced state burden that will result from a decrease in crime and benefits claims will fund the new savings incentive.

Currently, ‘problematic youth’ can cost the state as much as £70,000 by the time they reach the age of 28.

Investors who assist in aiding the lives of these young people will receive payment by results.

Increased limits

One possibility that would both encourage ISA to both save more and invest in youth-saving programmes would be to raise the annual ISA limit by £200.

This would the advantage of £200 extra pounds stashed away from the taxman, which would provide a hefty reward if left to grow over several years.

Currently, 20 million Britons hold an ISA, which has a present limit of £10,680 for adults.

Savings experts are welcoming the incentive programme, which would both encourage tax-free savings and help children through early intervention programmes.

Parents are encouraged to use their child’s Junior ISA eligibility as well as their own ISA limits in order to maximise the tax-efficiency of their savings.

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