With the fluctuation of the economic market in this current climate, it would be a deemed a wise move to look into saving for your child’s future as a financial precaution.

Junior ISAs (or Individual Savings Accounts) have replaced Child Trust Funds (CTFs) and offer a simple way for families to save towards a child’s future. One of the Junior ISAs key benefits is that it’s a tax efficient savings account, just like an adult’s ISA. They are intended as a way of creating financial support for children when they start adulthood, and can be used to pay education fees, put a deposit down on a property or even small business start-up.

They work very similarly to adult ISAs, in that money deposited will be tax efficient, and when the child reaches adulthood they are able to withdraw that cash and decide on what use they wish to put the savings towards. Junior ISAs are covered by the Financial Services Compensation Scheme, as long as they are held with UK-regulated banks, building societies or registered fund-management companies.

Just like regular ISAs, the Junior ISA Tax Allowance means that only a certain amount of money can be saved  efficiently annually. Parents, family and friends can contribute up to £3,000 a year

Junior ISAs will replace the Child Trust Fund. While CTFs were boosted by £500-£1000 state contributions, Junior ISAs simply present a tax efficient method for those parents who want to save for their children’s futures. Kids couldn’t access their Child Trust Fund until they were eighteen, and Junior ISAs will function in the same way.. Parents who already have a Child Trust Fund set up can continue to deposit up to £1, 200 per year into it, but will not receive any further state contributions. The good news is that children who were too old to receive CTFs are now eligible for Junior ISA accounts. Children born on or after 3rd January 2011 and under 18’s born before September 2002 are all eligible for a Junior ISA.

If you’re looking for a way to create a savings account for your children and they missed out on the Child Trust Fund scheme, then a Junior ISA is a great way to make tax efficient savings towards their future. They’ll only get access to the money once they are adult, and can use it in any way they see fit, from paying university fees to paying for driving lessons.