BEN WILKINSON: Why don’t more parents take advantage of the tax-free benefits available at Junior Isas?
We all want what’s best for our kids. So why do so few of us take advantage of the superior tax-free gains available in the stock market with Junior Isas?
Of course, the stock market can take a beating – as we’ve seen so dramatically this year – but history has told us time and time again that it (always) comes first.
Our story today shows that saving the same amount in Jisa shares and shares versus a regular cash account can yield a third more.
The stock market can take a hit – as we’ve seen again this year – but history has told us time and time again that it (always) always comes first
While the stock market can be risky for those who need their money to rely on it or rely on it for income, it’s much more resilient over the 18 years that parents typically save for their children.
But it was only after working on this story that I was finally driven to open stocks and share Jisa for my two-year-old son.
His first account was a child savings account with Nationwide that paid a reasonable 3.5 percent, but when it was lowered to 1 percent this year I knew I had to move the money.
I bought Premium bonds, which pay prices at a rate equal to 1.4 percent and have a chance to win £ 1 million every month.
But I know that these interest payments are inferior to what can be achieved with stocks and shares.
I had previously started opening a stock Jisa, but always left when it came to choosing the funds.
None of the names meant anything to me, and I was unwilling to bet my son’s savings on any of them.
Many parents will never want to take a risk with their child’s savings. But the interest is so low that money in cash accounts is swallowed up by inflation
Costs are also an obstacle for parents. You are told they exist, but there is no tangible information available on what they will really cost you.
I finally chose a provider whose fund listings gave me an idea of the risk and roughly what I would invest in.
The industry must make it easier for parents to make that leap to invest or a generation will miss out.
The rewards that the exchange offers should not be reserved for those who have an understanding of how to invest.
Many parents will never want to take a risk with their child’s savings. But interest rates are so low that money in money accounts is swallowed up by inflation.
And it can be argued that leaving your child’s savings over the period of 18 years at the mercy of interest is a greater risk than investing in the stock market.
But for now I have spread the risk and I am saving half in Premium bonds and half in the investment Jisa. We will see which one comes to the top.
Our report shows that there are hundreds of pounds to save if you turn your back on petrol and get behind the wheel of an electric car.
But the real challenge is to convince motorists that now is the time to buy one.
Many fear that they will run out of power on a long journey, have to queue at a gas station to charge their car, and then wait longer while it charges.
What is clear, from the government’s multi-million dollar investment, is that electric cars don’t go away and we’ll probably all drive them one day.
We may need a few more incentives. If the government went ahead and offered a generous scrapping scheme, that might just be enough.
The British car industry will certainly need the work.
Don’t pack yet!
Finally, there is sunshine at the end of the tunnel, with news that British people will soon be able to go abroad for their summer holidays. But as we reveal, it won’t just be sailing.
The biggest threat to your trip, of course, will be the coronavirus, and while the pandemic is still not under control, insurers are unlikely to cover you for all cases.
So listen to the advice of our experts before booking and wait until traveling to your chosen destination has been approved by the government and you can get the insurance you need.
A well-deserved break may be possible, but it can still be easily snatched until this terrible virus is defeated.
- Victoria Bischoff is gone