A number of people are wondering how the New ISA, which seems to have been christened “NISA”, will affect their savings plan for their children with Child Trust Funds (CTFs) or Junior ISAs.
The NISA was a welcome surprise from the Chancellor because adults will be able to keep more of their money out of the taxman’s hands; an additional £3120 in this tax year.
So how does this affect how parents might save for their children through CTFs and Junior ISAs?
CTFs and Junior ISAs are not affected by the introduction of the “NISA” as such. However, when the “NISA” is introduced on the 1st July 2014, the tax-free amount that can be put into a CTF and Junior ISA for the 2014/15 tax year will increase from £3,840 to £4,000.
Parents who have either tax-free savings accounts can take advantage of this increase but will have to wait until 1st July before being able to benefit from the increase and top-up those accounts.
There is nothing to prevent those Parents with CTFs already in place to take advantage of the increase to have as much money sheltered before considering transferring the money into a Junior ISA from April 2015.
The Children’s ISA has a range of Junior ISA funds available. For more details visit www.thechildrensisa.com or register your interest on this site to keep up to date with all the latest information about transferring your Child Trust fund.