Expert answers Junior ISA questions

These days there are many ways in which individuals can approach the issue of wealth management and one of options that recently became available was the Junior Investment ISA. This came into effect on November 1st and is available to all children who are resident in the UK under the age of 18 who do not already have a Child Trust Fund (CTF).

The allowance is £3,600 for the rest of this tax year and will be index linked from 2013-14. Meanwhile, it can be split between cash and stocks and shares.

Because the product is new, many consumers are unsure exactly how it works and, with this in mind, expert Emma Wall addressed a series of possible questions in the Daily Telegraph.

Firstly, she noted that unlike adult ISAs, there is a stipulation concerning when these investments can be cashed in that relates to the age of the children they belong to. The money cannot be accessed until the owner of the investment reaches 18 years of age.

Ms Wall then went on to specify what can be held in a Junior Investment ISA. She remarked: “[It] works in the same way as an adult ISA. It is a ‘wrapper’ in which you can hold any stock, fund or ETF. You can also choose to hold your allocation in cash by using a ‘cash park’ on an investment platform website.”

She added: “You can also save cash in a high street bank savings product. Unlike adult ISAs, you must choose just one provider at a time to manage your investment Junior Investment ISA and one provider to manage your cash Junior Investment ISA.”

The expert then pointed out that at present it is not possible to move existing Child Trust Finds into these ISAs as part of a wealth management strategy. However, she added that there have been calls for this to be permitted and the Treasury has said it will look into the issue.

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