Latest news with #JuniorIsa
Daily Mail
02-06-2025
- Business
- Daily Mail
My child has a Nationwide savings account, why didn't they get a £100 Fairer Share bonus?
When the Nationwide Fairer Share payment was announced I was disappointed to find my child, who holds a Nationwide Junior Isa, did not receive a £100 payment. The Junior Isa is open in their own name, not mine and has a balance of more than £100 in it. Am I missing something and why did they not receive it? Helen Kirrane, of This is Money, replies: Nationwide's 2025 Fairer Share deal was the building society's biggest yet. Nationwide dished out £400million to 4million members, who will each receive a payment of £100 between 18 June and 4 July. With 16million members, that means a quarter of Nationwide's members banked the payment But this still means three quarters missed out, because Nationwide had strict eligibility criteria as to who would be eligible for Generally to be eligible for the Fairer Share deal, members needed to have a qualifying Nationwide current account open on 31 March 2025. They then needed to have either a Nationwide savings account with at least £100 in it on any day at the end of March, or £100 left on a Nationwide residential mortgage on 31 March. Children were not exempt from receiving a £100 Fairer Share payment if they had the right savings account, one in their name, and a current account. Nationwide told me Junior Isas do qualify. As these are held in an account in the name of a child, the money will count towards the child's qualifying savings. To get expert advice as to why your child didn't qualify for this year's £100 Fairer Share payment, we spoke to Andrew Hagger, founder of personal website Money Comms and James Blower, founder of savings website the Savings Guru. Andrew Hagger said: The Nationwide Fairer Share terms and conditions state that a qualifying current account must be held together with either a savings account or mortgage. If a child has a Nationwide Junior Cash Isa in their name - not in the parents name for the benefit of the child - and also a Nationwide FlexOne Account, the current account for children 11-17 years of age, then they would qualify. In addition, they would only qualify if they made a payment into or out of the FlexOne account during March 2025 and also the Junior Isa must have had a balance of at least £100 on any one day during March 2025. The rules for the payout are very specific and unfortunately some customers will feel aggrieved, because they consider themselves a loyal customer, but didn't qualify and so have missed out on the Fairer Share payment. James Blower said: Nationwide's Fairer Share scheme pays out £100 to qualifying members. It did so in 2024 and its latest results, announced earlier this week, confirm that it will be doing so in 2025. The bonus is paid to members who hold a qualifying savings or mortgage account but crucially, they must also hold a qualifying current account. The reason for this is because I suspect that Nationwide wants to limit the payment to members who are more engaged with the mutual than those who merely have the odd savings or mortgage product with them – perhaps one that they may not even be aware of, because they've gone via an adviser. In the case of Junior Isas, the qualification is to also hold the qualifying children's current account too. Your reader's child has missed out because they didn't also hold this account by the qualification date, which was 31 March, as it was last year. My advice to any Nationwide members who did not qualify this year is, if they intend to stay a member, open the qualifying current account needed. Nationwide are encouraging members to switch their current account to them too – offering £200 bonus to customer who move over. This is well worth considering. Nationwide members have already received £50 for the Virgin Money takeover this year – so some members could benefit from £350 in cash this year with that bonus, Fairer Share and the £200 incentive. Certainly worth considering
Telegraph
26-03-2025
- Business
- Telegraph
Time is running out to use the tax loophole that lets parents stash £36,000 into an Isa
With the end of the tax year just around the corner, many parents are keen to maximise tax allowances and save for their children's future, particularly given speculation that Isa allowances could soon be cut. But if your child has a Child Trust Fund, you might be able to take advantage of a quirk in the system that could see you stash away up to £36,000 for your child tax-free – far exceeding the usual £9,000 annual Junior Isa limit. However, you'll need to act quickly as there's very little time left to make the most of this tax tip. This Telegraph Money guide will cover: Who is eligible for the children's saving trick? How to do it Is switching to a Junior Isa worth it? Who is eligible for the children's saving trick? According to stockbroker AJ Bell, the strategy involves using both a Child Trust Fund and a Junior Isa. This means that to be eligible your child must already hold a Child Trust Fund. Child Trust Funds were set up by the Government for children born between September 2002 and January 2011. They currently hold £10.5bn worth of savings, according to the National Audit Office, and many people, now adults, don't realise they have money stashed away. Junior Isas replaced them in 2011, and those with the old accounts have the option of transferring their balance across to the Isas – you can't hold both simultaneously. Up to £9,000 can be paid into either a Child Trust Fund or a Junior Isa each year. However, while the annual allowance for Junior Isas renews on April 6 at the start of a new tax year, the annual allowance for Child Trust Funds renews on your child's birthday. This means that if your child's birthday falls before the end of the tax year on April 5, you could potentially save £9,000 before their birthday, another £9,000 just after their birthday, and then transfer the funds to a Junior Isa to take advantage of its allowance. Isas are one of Britain's favourite ways to save because anything inside an Isa, whether savings or investments, grows free of savings, capital gains and dividend tax. Withdrawals are also tax-free. How to do it Let's say your child's birthday is March 28, and they hold a Child Trust Fund. If you have the money available, you could pay £9,000 into their account on March 27, followed by another £9,000 on March 29 after your child's birthday when the allowance resets. You could then transfer the pot to a Junior Isa on March 31. If the transfer completes in time (some providers may take a couple of weeks to complete the process), this gives you a brand-new allowance of £9,000 to use before the end of the tax year, bringing your total contribution to £27,000. Come April 6, you'll be able to use the new Junior Isa allowance of £9,000, meaning you'll have stashed away a total of £36,000 for your child completely tax-free. Of course, there are a few caveats to be aware of. First, you'll need to be able to afford to put away £36,000 over the next week or so. Second, whether you can take advantage of this loophole in full depends on the date of your child's birthday. If your child's birthday falls just before the end of the tax year in April, it's unlikely you'll have enough time to make two contributions to the Child Trust Fund and transfer the account to a Junior Isa before the start of the new tax year. Even if your child's birthday is in March, you may find that transferring the CTF to a Jisa takes you beyond the start of the new tax year, in which case you won't be able to pay in the Jisa allowance of £9,000 before April 6. But even so, making this switch still gives you a chance to tuck away £18,000 now, and a further £9,000 in the new tax year. Is switching to a Junior Isa worth it? Whatever your situation, if your child currently has a Child Trust Fund, it may be worth transferring those funds to a Junior Isa, where there is more choice of accounts and options are generally more competitive. One question you need to ask yourself is whether to open a Junior cash Isa or a Junior stocks and shares Isa. The younger your child is, the more likely it is that their savings will ride out the volatility of the stock market and deliver better returns over a long period of time. Charlene Young, pensions and savings expert at AJ Bell, said: 'Even if a family cannot make full use of the £36,000 loophole, many young people who have Child Trust Funds but are still under 18 would benefit from a transfer to a Junior Isa anyway, where the charges will likely be lower, and they'll have a much wider investment choice.' The money must be locked away until the child turns 18, at which point the Junior Isa is automatically rolled over into an adult Isa. The child can access their money if they wish to or continue saving for their future. Ms Young said: 'Although Junior Isa rules state that accounts must be set up and managed by a parent or legal guardian, anyone can pay money into it as a gift. 'This makes them especially useful for grandparents looking to make use of gifting allowances with frozen inheritance tax thresholds until 2030, and the prospect of unused pensions being brought into the value of their estates, too.' If your child already holds a Junior Isa, it's not possible to use a Child Trust Fund. Instead, there is still time to use up this tax year's allowance of £9,000, before the new £9,000 allowance kicks in on April 6. These savings can soon add up. A parent managed to save the full £9,000 Isa allowance every year into a Junior cash Isa paying a 1.5pc interest rate, then by the time the child turned 18, the account would be worth £187,170.
Telegraph
25-03-2025
- Business
- Telegraph
‘Our kids love McDonald's, so we invested their Isas in it'
Most young children fritter their pocket money away on toys and sweets, but Ivan Vera Marun's kids invest theirs in the stock market. The 44-year old university lecturer from Manchester has created 'mini' portfolios within his own Isa where he allows his three children – aged two, eight and 13 – to experiment with investments. The sub-portfolios hold about £500 each, and he saves into them every month or two. The children's picks so far include the iShares Physical Gold ETC – a proxy for investing in gold – and McDonalds. He says: 'Their asset preference is certainly biased towards shares. We occasionally invest in companies they are interested in. For example, they like to eat at McDonalds – so we use a platform to look at how the individual companies behave over time and to really appreciate that investing in shares can be a rocky ride. 'The main message is to show them that you can have something that looks risky and has a lot of ups and downs but in the long term there can be bigger rewards.' It has not always been smooth sailing. At first, his children were not the most disciplined investors. 'One of their initial issues was resisting the impulse to get money out and spend it any time they could see a win. The other has been trying not to put everything into the one company they like or that has performed the best.' But they're definitely learning, he says. 'What I'm trying to instil in them is the importance of diversification, for example through bonds, versus just going all in on the company that makes their favourite things. 'By now, they at least appreciate that it is a good idea to combine different types of assets – so that's what the Junior Isa is for.' In addition to the sub-portfolios, Vera Marun runs Junior Isas for each child, invested in exchange-traded funds (ETF) like the iShares S&P 500 Information Technology Sector and VanEck Crypto and Blockchain Innovators . He tinkers with these holdings very little, so the children will each have a nest egg by the time they are 18 years old. Since the Junior Isa was introduced in 2011, it has become a popular way for parents to set their children up for the future. Around 1.25 million accounts were opened in 2022-23, according to the latest figures from HM Revenue and Customs. You can save up to £9,000 a year into a Junior Isa for any child under the age of 18 and living in the UK. By consistently maxing out the annual allowance, parents could potentially help their children amass six-figure fortunes. Last year, figures obtained in a Freedom of Information request by the wealth manager RBC Brewin Dolphin revealed that the 50 biggest Junior Isas contained £761,000 on average. But for Mr Vera Marun, setting up investments on behalf of his children is not just about giving them a valuable nest egg. It's also about giving them an early financial education. 'My wife and I are originally from Venezuela, and we had this hard experience of seeing how socioeconomic instabilities can lead to hyperinflation – and how a whole generation can see their hard work dissipate because of mismanagement. 'So after we arrived in the UK and learned about the investing vehicles available to everyone in Britain – particularly Isas – we had a very strong realisation that this wrapper, this tool, is something really precious that's not available to many countries in the world. 'And I started to become aware there is a huge deficiency in terms of financial education, particularly personal finance education, not just in the UK but the whole world. 'For the whole population there is a need for a strong financial foundation particularly when people are in their young years. So I decided to take action with my kids.' Make children engaged with investments Mr Vera Marun is trying to teach his children financial skills he hopes they will take with them through life. More recently, he's been simulating what it would be like for them to earn a salary and pay into a pension. 'Something that we've been doing in the last year is setting them tasks – for example, cleaning – and they do that every week or every two weeks, and whenever they do these tasks, I give them a couple of pounds. 'Then I ask them, 'What do you want to do? Do you want to put the money in your investment account?' At the beginning, they were more often opting to save it in cash. They wanted to see the money there and eventually spend it on whatever they wanted. 'Whereas now, as they have become more aware of how investments work, they try and do it half and half. They say, 'Give me one pound and put one pound in my investments'.' He adds: 'By the time they become young adults, I'm just hoping they can be that person that starts to be a bit conscious about their savings and investments and doesn't opt out of a pension plan with an employer because they want more money for holidays.' Sarah Coles, of stockbroker Hargreaves Lansdown, says there are a number of ways parents can make their children more engaged with investments. One way is to follow shares they like. 'One of the easiest ways to show them this is to take a company they're interested in – like a media company or snack food – and follow its performance regularly. 'You can do this on an ad hoc basis, or put them into a watch list on an investment company app, which will track their individual and overall performance. You can then check in every week and see how their portfolio is faring.' Another is to give them some agency. 'It can be difficult to let them make mistakes, but as long as it's on a relatively small scale, there's room for them to take the lead on some investments and make their own choices. 'It not only hooks their attention, but it gives them experience of what it feels like to be an investor and make reasoned choices with real-world consequences.' She continues: 'There will be some periods of underperformance and some times when the market struggles. If you can show your child that this is all part and parcel of investing, they won't be too afraid of risk in order to benefit from the long-term potential of investing.'
Telegraph
12-03-2025
- Business
- Telegraph
How to pay for your child's university for £80 a month
Many parents dream of seeing their child graduate from university. Sitting proudly in the audience, waiting for their son or daughter's turn on stage, and then watching them pick up a hard-earned degree is a moment they will savour for life. But over the years, higher education has become very expensive – and it's still rising. Fees will hit £9,535 from the start of this academic year, a 3.1pc rise and the first since 2017. When living costs like rent, bills and groceries are added for students living away from home, the cost of going to university for three years can hit nearly £57,000, according to advisors Brewin Dolphin. Parents need to be savvy and forward-thinking to ensure they are ready to support their children's education. New research shows that those starting early, and setting aside money each month using a Junior Isa (Jisa), might be able to grow the pot to send a child to university – and more. Jisas were introduced in 2011 to replace child trust funds, and they're available for children under 18 who live in the UK. They're tax-free and you can pay in up to £9,000 a year. The child can take over the account when they turn 16, but the money can't be withdrawn until they turn 18, as they're designed to be long-term savings accounts. Investment manager, Vanguard, has calculated that saving £80 a month into a Jisa from birth until a child turns 18 would generate just over £30,000 – enough to pay for three years of tuition fees. For those who can save a little more, £175 a month would cover their tuition fees and living costs of £1,000 a month for the same period, with the pot reaching almost £67,000. And those who put away the full Jisa contribution allowance of £9,000 each year could hand their child a pot of £300,000 on their 18th birthday. Each scenario assumes an annual return of 6pc. As it's in a Jisa, everything is shielded from capital gains and income tax. James Norton, of Vanguard, said: 'Our calculations demonstrate the benefits of investing little and often to save for a child's future. Jisas are great vehicles to invest in as there is no tax or profits made. The money is locked away until the child reaches 18, at which point they can withdraw the money or leave it invested in a stocks and shares Isa for example.' There are two types of Jisa: cash, or stocks and shares. With cash Jisas, you will receive interest at a set rate. In stocks and shares Jisa, you make investments and keep any profits. A child can have either type of account, or one of each. You can still only deposit £9,000 each year across both. There are pros and cons to both. A cash Jisa is risk-free, but a stocks and shares Jisa could generate better returns – although it can also go down if your investments don't perform. Mr Norton added: 'There are a few considerations to think about with stocks and shares Jisas. Firstly, the parent or guardian should think about the timeframe of the investment. If it's 18 years, with the purpose of funding further education, for example, a significant amount of risk could be taken to maximise the opportunity to grow wealth in the early years. 'However, as the child's 18th birthday approaches, it would be sensible to start reducing the risk to ensure large losses aren't made just as they need to withdraw the money. 'It's also important to think about the spread of investments within the Jisa. A wide spread covering the main stock markets is a smart way of ensuring you hold outperforming stocks, improving your chances of growing your child's nest egg.' 'Having that money felt precious to me' Freya Taylor-Lester, 21, was born before Jisas were available, but she received a child trust fund. The Government made the first contribution and her mum helped build it up to £5,000. She says this instilled the savings habit and enabled her both to travel and pursue her dream of becoming an actress by helping to pay her tuition fees at Arts Educational in Chiswick. She said: 'My mum put money into the account every month. Over the years, it built up quite a bit and when I turned 18, I got access to it. 'I wanted to go to drama school. I used part of the money to fund my course because it's quite expensive. Very, very expensive in fact. It's quite insane how much drama schools cost to attend. 'I was working and kept adding to it. I did a couple of acting jobs and also worked the weekends and I would add all the money into that account. 'Obviously, I felt very lucky that I had that amount to start me off. Having that felt very precious to me and it helped me save for the next few years. It was like I wanted to keep that up, I didn't want to just spend it and it be gone.' The pot also enabled her to take a trip to New York City with her course mates. She said: 'This was the first time I went anywhere without my family. It just felt like being an adult for the first time and like the world was at your fingertips.' Since the government replaced child trust funds, Jisas have become popular. According to research from financial services provider OneFamily, a third of parents aged below 50 have opened a cash Jisa for their child and almost one in five have opened a stocks and shares Jisa. Asked what they'd like their child to use their Jisa for, around a third said saving for a house and the same proportion said putting it towards the costs of university. Jim Islam, of OneFamily, said: 'The power of long-term savings coupled with the importance of starting early can make a big difference to a young person's life. By investing over an 18-year period, even relatively small sums can have a huge impact by the time a young person enters adulthood. 'Savings accounts like Jisas and child trust funds offer a vital boost at a crucial time in their lives. Whether that's going into higher education, buying a car or putting it towards a property, these nest eggs can support a young person when they turn 18 and help the next generation build a bright future.'
The Independent
14-02-2025
- Business
- The Independent
How to build a financial nest egg for your child
Building a financial nest egg for your child has many advantages, including giving them a head start when they're older as well as helping them to understand how money decisions are made. Sarah Coles, head of personal finance, Hargreaves Lansdown, says children can also benefit from savings rates which are often more generous than their adult equivalent. When putting money aside, parents will want to weigh up the different accounts available. Some parents may want to keep the money in a savings or current account under their own name, to keep it out of reach of the child. But Coles cautions that parents doing this could 'pay the price of less interest, and you also face the risk of being tempted to spend it yourself'. There are also decisions to be made around keeping savings in cash, or in stocks and shares. Cash accounts may give parents some certainty over the returns their child will be getting, but Coles says parents could risk missing out on the potential long-term growth available from investing. 'If you have a time horizon of five to 10 years or more, then it's worth at least considering investment though a stocks and shares Junior Isa,' she says. Families should bear in mind that the value of investments can go down as well as up, and people may get back less than they paid in. Anyone, including parents and grandparents, can pay money into a Junior Isa, but the total amount paid in cannot go over £9,000 in the 2024-25 tax year. Money held in a Junior Isa belongs to the child and cannot be taken out until they reach the age of 18. It can be rolled into an adult Isa. Start investing with Trading 212. Capital at risk. Coles says Junior Isas can be a great way to introduce kids to investing, adding: 'By giving your children a stake, and talking to them about it, they are investors from birth. They never have to think 'am I the kind of person who invests?' because they already do.' Bare trusts are another way to invest on behalf of a child, says Coles. They are often used to pass assets to young people, with the trustees looking after them until the beneficiary is old enough. Coles adds that such trusts can often have tax advantages. People may want to consider taking financial, legal and tax advice on the suitability of a bare trust for their own circumstances before opening an account. Some parents thinking further ahead may want to contribute to a young person's pension – and by starting early the interest earned would have decades to roll up. But Coles says that, given children won't be accessing a pension until they're at least aged 50 and over: 'It means this is only the right home for money they won't need as they go through their working life.' She says this is why, in many cases, parents set up a Junior Isa and a young person's pension side-by-side.
