Speak roughly to your little boy,
And beat him when he sneezes:
He only does it to annoy,
Because he knows it teases.
Alice in Wonderland
We have come a long way from stuffing minors up chimneys, some might say too far after the recent riots! However, it is back to school time and many families will be suffering financially in trying to meet the costs of kitting out the kids. Interestingly, for families who are in real financial difficulties, there are over 3,500 charities which can give financial support but only 1% of parents seek help, according to Turn 2 Us which is part of a charity that looks into access to benefit entitlements.
One encouraging aspect of a recessionary environment is that the shops tend to have to offer bargains in order to get custom. This means that by shopping around it is possible to pick up back to school items cheaply. I have just seen two of the major stores offering school uniforms for as little as £4.50 with shoes around £6 to £7.
Let’s face it kids are expensive, a recent survey from Insurer LV= concluded that the cost of raising a child to the age of 21 is £210,000. This includes university tuition fees but excludes private education fees which can be astronomical.
Anyway, if you are lucky enough to have some money left over after the back to school onslaught and wish to put something away for little Johnny or Edwina, there is a new tax efficient arrangement which will be available from November. This is called The Junior ISA.
The new features of the Junior ISA are:
· children living in the UK who do not have a Child Trust Fund account will be able to have a Junior ISA
· people will be able to put money into a cash account or ‘stocks and shares’ account
· each child will be able to have one cash and one ‘stocks and shares’ Junior ISA at any one time
· there will be a total yearly limit of £3,600 for all payments into these accounts
· accounts will become ISAs when the child is 18
As with Child Trust Funds, the following will apply to Junior ISAs:
· the accounts will belong to the child and they are not able to get the money out until they are 18
· any money the accounts make will be tax free
· a range of banks, building societies, credit unions, friendly societies and stock brokers will offer Junior ISA accounts
There is no doubt that this is a very attractive and flexible way of building up funds for children. If you cannot afford to save yourself it is always worth trying Granny or Grandad or Auntie or Uncle.