If you’re looking for the best ways possible to support your child and provide them with the best start in life, chances are that you’ve looked into starting up a Junior ISA for them. Due to the tax savvy nature of a Junior ISA, more people are embracing the benefits of an ISA that supports their children without impacting their own tax allowances.
Opening a Junior ISA with Wealthify allows you to contribute a monthly amount to their future, from the day you open it right up until your child turns 18 years of age.
But what other benefits does a Junior ISA have, and how will it affect your ISA allowance? Below are 5 reasons why you should be considering opening a Junior ISA for your child.
It teaches your children about the benefits of saving money
Whether the ISA is a surprise gift for when your child turns 18 or something that you want them to know about and eagerly anticipate receiving, it’s an invaluable lesson for them about just how important savings are.
Financial security and awareness of how their ISA functions are powerful teaching moments. It promotes an understanding of finance that will take them far in life. So use an ISA as the proverbial gift that keeps on giving, and watch your child develop their own financial awareness.
You’re able to grow your Junior ISA tax-free
You’ll be entitled to contribute and save up to £9,000 per year in the Junior ISA. Whatsmore, the money you do put in has the ability to grow completely tax-free.
How long does this incredible benefit last? For as long as the money is kept in the Junior ISA account.
The money saved in a Junior ISA has no impact on your ISA allowance
Some people are apprehensive about Junior ISAs as they assume that it will have an adverse effect on their own individual ISA allowances.
However, the money saved in a Junior ISA has no impact whatsoever on the £20,000 ISA allowance of the person who opened the Junior ISA itself.
Others are able to contribute to a Junior ISA
One of the most attractive benefits of a Junior ISA for your child is that it isn’t just yours to contribute to. Family members and friends are also able to pay into it and help to contribute to the child’s future.
A financial gift that has had contributions from several different people reduces the burden of one person adding to it each month. It also makes the final gift a much more special one for your child!
It provides them with some financial security
You only want the best for your child, and while nobody wants to think about the unexpected things that life can throw at our loved ones, it’s essential to prepare them for absolutely anything that comes their way.
With a Junior ISA, you’re educating your child on good money habits and giving them the freedom to do what they please, while also providing them with a soft landing should they ever need it over the course of their life.