The announcement follows confirmation of product regulation by the Treasury which paves the way for providers to offer the Junior ISA from November 1. Family Investments will ensure its account is open for business from day one.
The Family Investments Junior ISA will be an investment based Junior ISA with monthly premiums from just £10. The low monthly premium makes the product affordable for many parents and offers access to stock market growth over the long-term.
John Reeve, Chief Executive of Family Investments said: “Children’s savings are a long-term financial commitment and to help growth potential it is important to invest in the stock market which historically offers greater returns than cash.
“Having conducted research amongst parents we know that the majority want to generate a reasonable return with 74% of the parents we surveyed saying that they wanted their kid’s savings to outperform a cash savings account. As a result we are offering an investment Junior ISA instead of a cash account to provide the greatest potential for growth.
“We welcome the government’s announcement that the annual contribution limit for the Junior ISA will be higher than expected at £3,600, and the limit for Child Trust Funds will also increase from £1,200 to £3,600 per year from November 1st 2011. However, we do understand that many parents have modest means and may not be able to take advantage of these higher limits, that’s why we’ve designed our Junior ISA to enable customers to invest a low monthly amount starting at just £10.
“Combining the low premium with an investment in the stockmarket will help ensure that children born today have the best possible chance of entering adulthood with a financial asset to meet unprecedented costs such as new university tuition fees and deposits for a first home.”
As many parents thinking about investing for their child’s future want to do so ethically, Family Investments will also offer an ethical Junior ISA option. Both products will allow parents to manage the account online.
Junior ISAs will be available to anyone aged under eighteen who has missed out on the Child Trust Fund. The proceeds of every Junior ISA will be held in the child’s name and will automatically roll over into an adult investment ISA when the child is 18.
Family Investments is a mutual with over 35 years experience of managing money on behalf of families and is the UK’s largest CTF provider managing 1.2 million accounts. The Junior ISA will fill the gap left by the CTF and will be particularly welcomed by the parents of 700,000 children born between January and November who have just missed out on the CTF.
Parents who would like to pre-register their interest in a Junior ISA in order to take out the product from November 1st can do so here – www.familyinvestments.co.uk
FACTFILE:
Family Investments’ Junior ISA - key product features:
• An investment Junior ISA invested in a balanced fund
• Low monthly premiums starting at just £10
• Parents can manage their Junior ISA account online which allows them to download a statement, manage contributions and check investment performance.
• Family Investments Child Trust Fund customers, who also open a Junior ISA account for another child, can manage both accounts online with the same login.
• An ethical version will also be available
Junior ISA features as announced today by the UK Government, which will also be available from the Family Investments Junior ISA account:
• Annual tax efficient allowance of £3,600
• Account must be opened by a parent or legal guardian
• Any member of the family, including grandparents, can make a contribution
• Proceeds will roll into an adult ISA when the child turns eighteen
• Annual contribution limit for the Child Trust Fund has raised from £1,200 to £3,600 in line with the Junior ISA
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