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Review Child Trust Funds before they reach maturity

In 2011, new CTFs were stopped when the government introduced the Junior ISA (JISA) which allowed them to invest on their behalf in a completely tax-free environment

The good news is that the annual allowance for this tax year is £9,000 – the same as for Junior ISAs. This has been increased from previous maximum investment amount of £4,368 per year.

These new ‘JISA’s’ can be a stocks and shares ISA and therefore can benefit from being exposed to market equities but also the effect of compound interest over the duration of the investment.

You are eligible to open an ISA as a parent or guardian if your child is under the age of 16. Your child can then have access to these JISA investments once the reach the age of 18. Your child can also apply for an ‘adult cash ISA’ once they reach 16 years old.

As part of a new tax year ‘spring clean’, it might be worthwhile considering how you can invest for your child’s future; and if a Junior ISA might offer better prospects for when they reach adulthood, and beyond.

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