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13th
Mar 2020
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Budget 2020: Junior ISA Allowance to Double

Budget 2020: Junior ISA Allowance to Double

For parents looking to put money aside for their children’s future, the ISA allowance for tax year (as announced in the Budget on March 11th) should allow considerably more savings in their tax-free wrapper. 

What is a JISA? 

A JISA is an ISA (a tax-free wrapper) which can be opened by parents or guardians for their children. We have two blogs on JISAs - an over-arching blog the basics of JISAs, and a second one on Junior Stocks and Shares ISAs. If you want to know more about JISA options, those blogs are a good place to start. 

What's happened? 

The Government’s Budget was announced this past Wednesday (March 11th 2020) when Chancellor Rishi Sunak took to the podium in the House of Commons. 

He put forward the Government’s tax and spending plans for the upcoming tax year (year 2020/2021).

In this speech, the Government laid out their plans for the ISA allowances for the upcoming tax year – including the ISA allowance limit for 2020/2021, which will remain at £20,000 – the same as the previous two years.

The biggest point of discussion concerning ISAs dominating the news headlines is that of the announced increase to the Junior ISA (JISA) allowance.

The previous year’s ISA allowance set the upper limit for the amount you can put into a JISA at £4,368 per year.

What is the new limit? 

In tax year 2020/2021 (which will start on April 6th 2020), this will increase to almost double; the new upper limit will be £9000 per tax year. This is a high amount to have to spare - but for those who do, and want to put this into a tax-efficient savings fund to save for their child's future, this is excellent news. 

What difference will this make? 

This will make a huge difference for parents who are saving or looking to save large amounts towards their children’s future, enabling them to put aside more than double what was allowed in previous years within the tax-free ISA wrapper. JISAs can be hugely beneficial for young people when they are taking their first steps into life, funding university fees or maintenance, helping pay for a first home etc. 

In the official Budget document, the Government stated that, “By saving towards their future, families can give children a significant financial asset when they reach adulthood – helping them into further education, training, or work."

Read more on Junior ISAs

Junior ISAs

Junior Ethical ISA

from Legal & General

Regular Savings
  • Investment Options: Invest from £20 pm or from £100 lump sum. The L&G stocks and shares Junior ISA is a great way to help you save for a child or grandchild, up to the annual allowance of £4,368 for the 2019/20 tax year.

Why we like it: L&G offer a "Future World" range allowing you to invest in funds that don’t just track the market – they seek to make positive change. e.g. The Future Word sustainable Opportunities Fund invests in a wide range of company shares, bonds, property and real assets (including property, land and infrastructure) which meet's L&Gs long term sustainable investment criteria, based on environmental, social and governance factors, while the Future World Climate Change identifies companies that are critical to the shift to a low-carbon economy and are paying special attention to their actions.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Junior Tracker Fund ISA

from Legal & General

Regular Savings
  • Investment Options: Choose from over 19 Tracker Funds. Invest from £20 pm

Why we like it: Looking for a junior ISA investment option for your child or grandchild? Legal & General has over 9 million customers in the UK, and over £1.1 trillion of assets under their management (as at 31st December 2019). They have one of the largest range of tracker funds to choose from with 19 low cost index tracker fund options to choose from. You can invest with a low minimum of £100 lump sum or £20 per month, and you can manage your child/grandchild's account easily online.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Junior Stocks and Shares ISA

from Hargreaves Lansdown

Regular Savings
  • Investment Options: Invest from £25 per month or deposits of £100.

Why we like it: Invest for your child from £25 pm tax free. A wide range of top performing funds to choose from. The annual charge for holding investments in a Hargreaves Lansdown Junior ISA is never more than 0.45%. Your dealing and other charges will depend on the investments you choose.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

New (tax) Year, New You: How to Make the Most of Your ISAs in 2020/2021

6th April 2020

Dawn breaks on the morning of April 6th 2020 – the sun is (potentially shining) and the new tax year has begun. With £20,000 of possibilities for your tax allowance for this new tax year – we’ve answered the most common questions that savers have at this stage. 

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