Parents forego their own savings to open a Junior Isa for their children

  • The number of small schools opened by parents since 2019 increased by 101%
  • Parents were avoiding their own Isa to open their Isa to their children

Parents and guardians have ignored Issa’s conquest for themselves to give priority to conquest Junior Issa For their children, new data suggest.

Between October and December 2023, the number of Jisas opened by parents and guardians rose by 101 per cent since 2019, exclusive data for This is Money from Scottish Friendly has revealed.

He points out that planning for future generations has given greater priority to parents and guardians.

The figures show that a shift in parents and guardians prioritizing saving for their children over themselves has led to a decline in Isa investments over the same period.

A gift to the future: The number of small schools that parents have opened for their children has increased by 101% since 2019

A gift to the future: The number of small schools that parents have opened for their children has increased by 101% since 2019

Mums are leading the way when it comes to opening a new Junior Isa for their children. Since the beginning of 2019, the number of new geza opened by mothers has increased by 115 percent.

The number of parents who opened new bags for their children increased by 87 percent in comparison.

The increase in GISA investments was more prevalent among younger parents, ages 18 to 34. The number of Jesuses opened by parents in this age group has increased 35 times compared to 2019.

– See our table of the best Junior Isa prices here

The amount of money placed in Jesus by parents and guardians after the summer of 2023 has also increased by 107 per cent despite ongoing cost of living pressures and the impending Christmas period.

At this time, the best Jisa was paying a rate of 4.7 per cent and was offered by Coventry Building Society, according to rate checkers Moneyfacts Compare.

The best rate for Jisa is now 5.49 per cent and is offered by Bath Building Society.

Every area across the UK has seen an increase in new Jesuses opened by parents and guardians since the start of 2019.

But Scotland topped the increase with 191 per cent, closely followed by the East Midlands, which saw a 147 per cent increase in the number of schools open.

“It is clear that saving and investing for children remains a top priority for families across the UK, and more needs to be done to support and encourage this where appropriate,” says Kevin Brown, savings specialist at Scottish Friendly.

“The government has recently hinted that Isa reforms may be coming, and we believe changing the rules to allow other family members, such as grandparents to open Isas too, would provide a much-needed boost to children’s savings.

“Removing these restrictions can only help put children on a stronger financial footing as they reach adulthood and should therefore be strongly factored into any planned reforms.”

Changes in Issa’s new age begin in April 2024

as part of Issa reform package presented by the governmentscheduled to commence from 6 April 2024, there will be a change in the age at which you can open a Cash Isa account.

Currently, you can open an ordinary shares and cash adult Isa at the age of 16, while you must be 18 to open an adult cash and shares Isa.

Personal Savings Allowance (PSA)

The Public Service Act was introduced in April 2016 by Chancellor George Osborne.

Basic rate taxpayers qualify for a £1,000 PSA. This means they can receive up to £1,000 a year in tax-free savings interest.

Higher rate taxpayers get a PSA of £500 each year.

Additional rate taxpayers do not receive PSA.

PSA has remained at the same level since its introduction, although savings rates are now three times higher than they were then.

From the new tax year, you must be 18 to open either a cash Isa or a stocks and shares Isa.

The Government says this will bring the cash in line with the age requirements already in place to open stocks, shares, innovative finance and Lifetime ISAs.

“This change means young people will miss out on putting up to £20,000 into a cash Isa at ages 16 and 17 – effectively £40,000,” says Anna Bowes, co-founder of Savings Champion.

“They are unlikely to have that kind of money themselves – so a parent may have given it to them.”

“But of course if that is the case, even though any interest earned in the Isa will be tax deductible for the child, because he or she is gifted, the parent may need to pay tax at their own marginal rate.”

There is usually no tax to pay on children’s savings accounts, including GISAs.

If in a tax year a child earns more than £100 in interest from money provided by a parent in a savings account or GISA, the parent will have to pay tax at their own marginal rate on all interest if it is higher than their share of the Personal Savings Allowance.

(tags for translation) Daily Mail

Leave a Reply

Your email address will not be published. Required fields are marked *