By Max Clarke
The Financial Secretary to the Treasury, Mark Hoban MP, has today published draft regulations detailing the Government’s new tax-free children’s savings accounts or ‘Junior ISAs’.
It is expected that 6 million children will be eligible for the ISAs at launch, with a further 800,000 becoming eligible each following year.
“Junior ISAs are a great example of a simple, clear and jargon-free financial product that allows families to save and invest for their child’s future. They allow parents and family friends to contribute to children’s savings and will strengthen the savings culture. I look forward to seeing these on the high street in a few months’ time,” explained Hoban.
“The issue has always been that money saved by parents for their children has had its income taxed on the parent. So the only real beneficiaries are likely to be higher rate taxpayers. Will that become unacceptable in the present environment?" Commented David Ingall, partner at leading accountancy and business advice firm, JWPCreers.
Ingall continued: “The child trust funds were a bit of nonsense unlikely to be of real benefit. Why should the Government save on behalf of children? By the time the children were able to spend the funds then inflation would probably have eaten away at the value of the savings. The less the Government gets involved in these sorts of things, the better. They are after all, spending our money!”