New Nest Egg for Juniors

As adults we all appreciate the benefits in having some money tucked away for tough times or unexpected expenses.

So a long term investment to act as a nest egg for your little ones will be greatly appreciated in years to come for those university fees, a new car or even a deposit for their first home.

You may already know that the government stopped the Child Trust Fund (CTF) scheme in 2010, but what you may not be aware of as yet is the new offering that the government has announced in 2011 in its replacement - the JISA (Junior Individual Savings Account). The JISA is open to all those children (UK resident) who were not eligible for the CTF.

It's designed to be the new tax efficient way to save on behalf of a child, providing an opportunity to gradually accumulate cash over several years, in order to ensure young adults have some financial backing when they need it the most. Unfortunately the new JISA doesn't have a government contribution, unlike the old CTF where every new born was given £250. However on a positive note, research shows that some JISA rates are better than those of the CTF.

Parents or guardians must open the JISA for their child, and then any family member or friend can contribute towards the nest egg which will be locked away until the child turns 18. There is a £3,600 annual allowance for the JISA and from 2013 this will rise annually with inflation.

JISAs are offered by private providers with the choice of investing into a cash-based or stocks and shares-based account so get in touch with your local independent financial adviser to find out more.