28th October 2010

F&C welcomes news on "Junior ISA"

F&C, a leading provider of children's savings schemes, has welcomed this week's announcement by Financial Secretary to the Treasury Mark Hoban that the Government is to create a new tax-free children's savings account with features similar to Individual Savings Accounts. The Treasury expects these accounts to be available by Autumn 2011.

Jason Hollands, Head of Corporate Affairs at F&C, said: "We welcome the news that the Government is to develop a voluntary tax free savings account for children. With the cap on university fees expected to be removed, such as scheme will play an important role in helping parents, guardians and grandparents to prepare children for potentially significant future financial costs such as a higher education or getting on the first rung of the housing ladder.

F&C has long believed in this type of scheme. We first wrote to George Osborne in October 2009 when he was Shadow Chancellor recommending that even if the state contributions were to withdrawn, Child Trust Funds could be retained as a voluntary tax free savings account.

The extension of the ISA regime to children, particularly if stripped of some of the restriction of CTFs such as the obligation to offer a Stakeholder option and the low cap on annual contributions, would be highly welcome by parents and encourage strong participation by the financials services industry."

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