Latest news with #JuniorIsas
Scottish Sun
04-05-2025
- Business
- Scottish Sun
HMRC issues warning to people with a hidden bank account that they could be missing out on up to £2,200
HMRC has issued a new warning to millions of young people who could be missing out on £2,200 which is being held in a forgotten bank account. Child Trust Funds are a type of long-term tax-free savings account that was set up for every child born between September 1, 2002 and January 2, 2011. 1 Thousands of young people could be missing out on £2,200 according to HMRC Credit: Getty It is thought that £1.4billion which belongs to 728,000 young people is sitting in Child Trust Funds waiting to be claimed. But many young people do not know that the account exists or that they can now access the cash. HMRC has now issued a warning on social media website X to people born between 2002 and 2011 to check if they have one of the accounts. The post said: 'Born between 2002 and 2011? You may have a #ChildTrustFund, which can be cashed in as soon as you turn 18.' You can check if you have a Child Trust Fund online by visiting: To do so you must be aged over 16 or a parent. You will need your full name, National Insurance number, address and date of birth. If you are a parent who is looking for your child's account all you need is their full name, address and date of birth. The tool will identify who your Child Trust Fund provider is. It will not tell you how much money is in the Child Trust Fund. What Does My Tax Code Mean? A Simple Guide to Your HMRC Letter Once you have completed the form you will get a letter from HMRC with details of the Child Trust Fund provider. You will usually get this within three weeks of HMRC receiving your request, if you apply online. Postal applications will take a little longer. If you do not get a response within six weeks then write to HMRC. What is a Child Trust Fund? Child Trust Funds are long-term, tax-free savings accounts which were set up for every child born between September 1, 2002 and January 2, 2011. The Government paid in £250 for every child during that time period, or £500 if they came from a low income family. An extra £250 or £500 was paid in when the child turned seven, depending on their families' economic situation. In 2010, this was reduced to £50 for well off households and £100 for those on lower income. The scheme was scrapped in 2011 and later replaced with Junior Isas. Parents or friends can pay in up to £9,000 into the child's account tax-free and the money is usually invested into shares. But many parents did not continue to add money to the accounts after the scheme was scrapped and so many of the accounts were lost or forgotten. The savings are held in banks, building societies and other savings providers, not by the Government. The money stays in the account until it is withdrawn or re-invested. Young people can take control of their Child Trust Fund at 16 but can only withdraw funds when they turn 18 and the account matures. What should I do once I claim the money? Most people put the cash into a bank account, invest it or transfer it into an Isa. You can also ask your Child Trust Fund Provider to give you the money and get it paid into your bank account. If you do this you will need to provide the bank account details you wish to transfer the cash into with HMRC. If you would rather invest it, you can transfer it into an Isa. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
The Sun
04-05-2025
- Business
- The Sun
HMRC issues warning to people with a hidden bank account that they could be missing out on up to £2,200
HMRC has issued a new warning to millions of young people who could be missing out on £2,200 which is being held in a forgotten bank account. Child Trust Funds are a type of long-term tax-free savings account that was set up for every child born between September 1, 2002 and January 2, 2011. 1 It is thought that £1.4billion which belongs to 728,000 young people is sitting in Child Trust Funds waiting to be claimed. But many young people do not know that the account exists or that they can now access the cash. HMRC has now issued a warning on social media website X to people born between 2002 and 2011 to check if they have one of the accounts. The post said: 'Born between 2002 and 2011? You may have a #ChildTrustFund, which can be cashed in as soon as you turn 18.' You can check if you have a Child Trust Fund online by visiting: To do so you must be aged over 16 or a parent. You will need your full name, National Insurance number, address and date of birth. If you are a parent who is looking for your child's account all you need is their full name, address and date of birth. The tool will identify who your Child Trust Fund provider is. It will not tell you how much money is in the Child Trust Fund. What Does My Tax Code Mean? A Simple Guide to Your HMRC Letter Once you have completed the form you will get a letter from HMRC with details of the Child Trust Fund provider. You will usually get this within three weeks of HMRC receiving your request, if you apply online. Postal applications will take a little longer. If you do not get a response within six weeks then write to HMRC. What is a Child Trust Fund? Child Trust Funds are long-term, tax-free savings accounts which were set up for every child born between September 1, 2002 and January 2, 2011. The Government paid in £250 for every child during that time period, or £500 if they came from a low income family. An extra £250 or £500 was paid in when the child turned seven, depending on their families' economic situation. In 2010, this was reduced to £50 for well off households and £100 for those on lower income. The scheme was scrapped in 2011 and later replaced with Junior Isas. Parents or friends can pay in up to £9,000 into the child's account tax-free and the money is usually invested into shares. But many parents did not continue to add money to the accounts after the scheme was scrapped and so many of the accounts were lost or forgotten. The savings are held in banks, building societies and other savings providers, not by the Government. The money stays in the account until it is withdrawn or re-invested. Young people can take control of their Child Trust Fund at 16 but can only withdraw funds when they turn 18 and the account matures. What should I do once I claim the money? Most people put the cash into a bank account, invest it or transfer it into an Isa. You can also ask your Child Trust Fund Provider to give you the money and get it paid into your bank account. If you do this you will need to provide the bank account details you wish to transfer the cash into with HMRC. If you would rather invest it, you can transfer it into an Isa. .
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.'
The Independent
21-03-2025
- Business
- The Independent
The smart savings moves to make before the new tax year starts
With the end of the tax year fast approaching on April 5 2025, time is running out for savers and investors to make the most of allowances before they 'reset'. But research indicates that 'investment anxiety' is holding some people back, with seven in 10 (70%) UK adults citing barriers such as a lack of experience or concerns around losing money. Craig Rickman, a personal finance expert at interactive investor (ii), which commissioned the research, suggests firstly, making the most of your Isa allowance. The annual limit for the amount that can be newly saved into Isas is £20,000. Rickman says: 'If you have unused Isa allowance this tax year and plan to add more, make sure you do before the allowance resets.' He also highlights the various different types of Isas to choose from, including Lifetime Isas, Innovative Finance Isas and Junior Isas (for children). Savers may choose to hold their money in cash, stocks and shares, or a combination. Lifetime Isas can be useful to people saving for their first home as they come with a government bonus, but there are terms and conditions to consider, such as potential withdrawal penalties in certain circumstances. Innovative Finance Isas, meanwhile, enable investments to be made with businesses. Rickman says that when choosing an Isa, 'the best one for you will depend on your personal goals and risk appetite'. Putting money into investments, rather than cash savings, does carry the risk of getting back less money than you paid in, although there may be bigger rewards – if it turns out that the investments perform relatively strongly over the longer-term. Rickman says Junior Isas can be a great way to help children navigate the wave of financial challenges of early adulthood. 'While only a parent or guardian can open a Jisa for a child, anyone can contribute once the account is up and running,' he adds. Potential returns and rates of interest will be something savers often weigh up when considering savings accounts, but something else to consider might be whether an account aligns with your values. Roger Hattam, director of retail banking at Triodos Bank UK, says: 'Whether you're saving in a cash Isa, or investing in stocks and shares or innovative finance, your money won't just sit there: it will be actively used by your bank to fund whichever businesses and sectors that bank sees fit. And this is where your choice really matters.' He adds: 'Even a small amount of money can make a huge impact when it's being invested back into transformative projects that deliver measurable positive impact.' Hattam suggests researching ethical campaigns and independent guides to find more sustainable and transparent savings products.
