Most of us are familiar with the “bog standard” NISA, where each person has an allowance of £15,240 that can be used in different combinations of Cash and Stocks and Shares.
However from this tax year there are some new ISA opportunities, they are the Help to Buy ISA and the ability to convert old Child Trust Funds (CTF) to Junior ISAs and set out below is a quick explanation.
Help To buy ISA
The Chancellor Mr George Osbourne announced in his March budget that a new ISA will become available which will attract bonuses added by the government to help first time buyers get on the property ladder.
George Osbourne announced in his July 2015 budget that the Help To Buy ISA will be available from 1st December 2015.
- To qualify you must be a first time buyer and 16 or over, if you are buying a house with another first time buyer then both will qualify for an account.
- The maximum you can save each month per account is £200 which will attract a £50 bonus from the government; it is a monthly allowance, so if you miss a month you cannot catch up with missed payments, although in the first year you can add an additional single lump sum of £1,000 which will attract a £250 bonus.
- The maximum bonus per account by the government will be £3,000.
- Available to anyone 16 or over.
- The bonus only applies on purchase of up to £450,000 in London and £250,000 outside London.
- The Bonus will be paid when you buy your first home.
- The monthly payments can be made by a family relative, and will still attract the government bonus.
The accounts will soon become available through banks and building societies and represent a great boost in saving for a deposit; it could be an even greater boost if used by parents and grandparents as part of a wider financial planning process.
CTF to Junior ISA
Many parents hold Child Trust Funds for their children, partly due to the Labour government providing a £250 voucher to start these plans off. Unfortunately the vast majority of CTFs were either expensive, offered poor interest rates or limited funds in which to invest.
From April this year it is now possible to transfer your child’s old CTF to a Junior ISA (JISA) which are more modern, more cost effective and have a wider choice of investment solutions.
If you hold a CTF for your child, please get in touch, we can assist with recommending a JISA provider and help you make use of your child’s allowance of £4,080.