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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 Stocks & Shares ISA

from Fidelity

Regular Savings
  • Investment Options: Fidelity offer over 3000 Funds from over 70 Investment Companies.

Why we like it: You can tell Fidelity your risk preferences and they will suggest funds for you to consider for your child. You can also use their "Select 50" list of Fidelity's favourite funds. Alternatively If you want to look at all investment options you can use their poweful search tool. Fidelity have a low cost service fee that starts from 0.35% pa.

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.

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.

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Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

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