- You can support your children tax-efficiently with a Junior Isa
- But it is not the right account if you want to maintain control over the money
Wanting to give children a great start in life while also teaching them to handle money with care is a balance many parents attempt to strike. Junior individual savings accounts (Jisa) can be helpful for this – and can also help reduce your inheritance tax (IHT) bill when passing wealth to the next generations.
The £9,000 annual Jisa allowance is on top of parents’ £20,000 standard Isa allowance, which means that two parents with two children can invest up to £58,000 a year and later withdraw the money tax-free. Alice Haine, personal finance analyst at Bestinvest, notes: “While a regular savings account can be an effective way to teach young children about money, particularly if they want to save towards a particular toy or gadget, a Junior Isa is a more tax-efficient option for bigger financial goals such as funding a gap year, university fees or a first car, that require larger sums.”