Junior ISA tax deadlines for 2018/2019

If you would like to start a Junior ISA, or if you already pay into one for your child or grandchild, don’t forget to open or top up the account before 5 April 2019 if you want to make the most of the tax-free savings allowance for the 2018/2019 tax year.

How much can I invest in a Junior ISA?

Each tax year there is a maximum amount of money you can save into your Junior ISA. For example, during the 2018/2019 tax year, the savings limit for a Junior ISA is £4,260 and this will increase to £4,368 in 2019/2020. So you can save up to a maximum of £4,260 through regular payments, lump sum payments and top ups into your child or grandchild’s Junior ISA up to 5 April 2019 before the new allowance starts on 6 April 2019.

Can I carry my Junior ISA allowance into a new tax year?

The tax year runs from 6 April in one year to 5 April the following year and your allowance refreshes at the start of each tax year. Any allowance which isn’t used by the end of the tax year will be lost, and cannot be carried through to the following tax year or added to your new allowance.

Who can contribute to a Junior ISA?

Here at Foresters Friendly Society, our Junior ISA is a great way to put money aside for your child’s future whether saving regularly or investing a lump sum each year. As a parent/guardian of the child you can stop, start and change the level of contributions at any time during the year, and once opened anyone (such as parents, grandparents, relatives etc.) can pay into the account. You could even encourage your child to make their own contributions using their pocket money to get them into the habit of saving for the future.

The money you invest in our Junior ISA will be invested in our with-profits Order Insurance Fund, which offers the potential for higher returns than a cash ISA and has less risk than would be associated with a Junior ISA that is invested solely in stocks and shares. Once your child turns 18, they will then be able to access their Junior ISA which can then be invested in an adult ISA, or used for anything from their education to buying their first car.

If you’re interested in opening a Junior ISA for your child and want to find out more about how it works then request an information pack today!

You should be aware that in some investment conditions your child may not get back the value of the original investment. Tax rules may change in the future and depend on individual circumstances. Inflation will affect what your child can buy when they cash-in their Junior ISA.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

How to open a Junior ISA in the 2018/2019 tax year

If you are thinking about starting a savings account so you can put aside money for your child’s future, you may be considering a Junior ISA (JISA). These accounts are long-term, tax-free savings for children, which they will have access to when they turn 18.

When it comes to opening a Junior ISA, there are some conditions that need to be followed, so we’ve put together an easy guide for you to see if your child would be eligible.

Who can open a Junior ISA?

A Junior ISA can be set up by a parent or guardian, registering their details as the primary contact until their child turns 16.

Your child must live in the UK and be under the age of 18. If your child is living outside of the UK, you can only open a Junior ISA if they depend on you for care or you are a Crown servant.

Children aged 16 or 17 can open a Junior ISA themselves.

What if my child already has a child trust fund?

If your child already has a child trust fund, they won’t be able to open a Junior ISA at the same time, however you can ask your chosen provider if you can transfer your child’s trust fund to the Junior ISA.

What if my child already has a Junior ISA?

If your child already has a Junior ISA with another provider, you can transfer to the Foresters Junior ISA. You should check any conditions your existing provider may have but we can manage the transfer on your behalf making it easier and quicker for you.

How to open a Junior ISA with Foresters Friendly Society

Here at Foresters Friendly Society, you can open a Junior ISA with a lump sum of £500 or set up a direct debit from £10 a month to make regular payments.

You can also top up the account as and when you want. During the current tax year 2018/2019, the saving limit for a Junior ISA is £4,260 which needs to be used by the 5 April 2019 before this year’s entitlement ends and the allowance refreshes to £4,368 for the next tax year.

Anyone (such as Parents, Grandparents, and Relatives etc.) can contribute to the account’s funds, but no one can access the savings. As the child’s parent or guardian, you will manage the account until they turn 16, at which point they can then take control. Once your child turns 18, they will then have access to the funds to either reinvest into an adult ISA or spend as they please.

If you’re interested in opening a Junior ISA for your child and want to find out more about how it works then request an information pack today!

You should be aware that in some investment conditions your child may not get back the value of the original investment. Tax rules may change in the future and depend on individual circumstances. Inflation will affect what your child can buy when they cash-in their Junior ISA.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

3 things to consider when choosing a Junior ISA in the 2018/2019 tax year

If you are thinking about saving for your child’s future by opening a Junior ISA and are not sure where to start, here is a short checklist of points to consider, to help you along the way.

How long would you like to save for?

You should consider the length of time you will be saving for versus how much you can regularly put away each month or year. The younger your child is when you open a Junior ISA, the more time you will have to reach your savings goal for them.

Which type of Junior ISA is right for you?

Junior ISAs are available as Cash ISAs or Stocks & Shares ISAs and the maximum amount you can invest during the current 2018/2019 tax year is £4,260.

Here at Foresters Friendly Society, our Junior ISA is invested in our with-profits Order Insurance Fund which entails less risk than a Junior ISA that is invested solely in equities since the money is invested across a balanced mix of assets including property, government bonds, and equities. It also offers the potential for higher returns than a cash ISA but has higher risk associated with it. You should also be aware that depending on investment conditions you may not get back the value of your original investment and that inflation will affect what your child can buy when they cash-in their Junior ISA.

Find out more about with profits in this short video:

Have I left it too late?

A Junior ISA can be opened for a child until they turn 18 so it may not be too late to start saving for their future, no matter how big or small. Even if your child is 13 and you put away £50 per month, it would amount to £3,000 before any growth or returns. This could help them with anything from learning to drive to paying towards the costs associated with higher education. Children aged 16 and 17 can open a Junior ISA themselves.

If you’re interested in opening a Junior ISA for your child and want to find out more about how it works then request an information pack today!

Tax rules may change in the future and depend on individual circumstances.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

Teaching your child about finance with digital pocket money

Digital pocket money for children

Following the arrival of the newest member of the royal family, its a timely reminder of how events such as having children are a great time to start thinking about the future, particularly when it comes to finances.

Children learn about money from their parents

When you have children, it’s not only important to plan your own money and save for their future, but it’s also important to teach your children about money and instill some financial education.

It’s never too early to teach your little ones the importance of managing their money and saving. After all, parents have the biggest influence when it comes to shaping their children’s attitudes to money.

Pocket money apps and websites for children

As the world of technology continues to evolve at an ever-increasing rate, so too do the tools available to teach children about the value of money and the importance of saving.

There are now a whole range of clever, colourful, and engaging digital apps and websites that can help children as young as four learn about coins, saving and spending.

Just like in the real world, these apps and games can help them to learn how money works – if they spend all their digital money in one go, its game over!

Websites like Topmarks have free money games which can help children from 3 to 14 years old learn about money. Other apps come complete with a contactless card, allowing children to take charge of their own money from the age of 6. Accounts like GoHenry allow parents to retain a level of control over what their children do with their money, whilst also educating their kids about the value of money.

Got you thinking about saving?

Our children’s savings plans can help you save for your child’s future from as little as £10 a month.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

You should also be aware that in some investment conditions and depending on the savings product you have chosen, you may get back less than you have paid in.

Adults Vs Teens – Who are the savers & spenders?

Worrying about how your teenager handles their money? Don’t. Our Saving for Children research found that they are more responsible than we think when it comes to money.

We carried out a survey into how adults save for children, and how teenagers plan to use the money saved for them, which revealed that a whopping 62% of teens said they would put money into a savings plan if they received £10,000.

The vast majority of adults (73%) are already saving, or intend to start saving for their kids, but our study showed that some parents and grandparents are worried about the financial mistakes teens could make once they get their hands on the cash.

Adults Vs Teens

Our survey showed some unexpected sensible behaviour, with more than half of teens saying they would put money into education, and 21% would use it for a deposit on a home. This could be the result of finance now being taught as part of the UK’s national curriculum, but the majority of teens surveyed said that they don’t learn enough about financial education at school and that their money management lessons start at home.

Download a PDF of Adults Vs Teens – Who are the savers & spenders?

Saving with Foresters

Our savings plans can help you save from as little as £25 a month for yourself or £10 a month for your children.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

What’s the best saving account for my child?

When it comes to building up a pot of cash for a child’s future, there’s a lot to consider…

Deciding how to save for a much loved child’s future can be a pretty daunting task. Should you make the most of your child’s increased Junior ISA (JISA) or Child Trust Fund allowances, each now offering up to £4,080 annual tax-free savings in the current 2016/2017 tax year, or should you branch out and find a different account or save for your child in your own name?

Choosing a way of saving for your child that suits you can be made easier by asking yourself a few questions:

  • How much would you like to save, and for how long?
  • Can you commit to longer-term, monthly payments?
  • Would you prefer the money to be untouchable, until the child is a certain age?
  • Would you like to have a say in how the money is spent?
  • Do you mind an element of risk which could generate a potentially higher rate of return?

“It’s their money and they should choose how they spend it”

If you feel that it’s their money and it’s up to them what they do with it, then a regular savings plan like the Child Tax Exempt Savings Plan offered by Foresters Friendly Society, could be one to consider. Monthly payments of £25 are manageable, the plan guarantees a tax free cash sum for your child, providing all monthly payments are maintained for the full term of the plan, and the money can’t be accessed until the plan, which can run for between 10 and 25 years, matures. Plus as the plan is set up in the child’s name, the cash will go directly to them.

“I’ve saved the money so I feel I should have a say in what it’s spent on”

If you’d like to have more control over when the child you’re saving for receives the money and what they use it for, a Tax Exempt Savings Plan could suit. It works in much the same way as the children’s version, but the money is saved in your name instead, so the payout will go to you ensuring you retain control.

“I want a flexible plan, so I can access the money if I need to. I’m also comfortable to balance an element of risk with the potential for higher returns”

If this sounds like you, then you could be in the market for Foresters Stocks and Shares ISA. You can save regularly or pay in lump sums (currently up to £20,000 per tax year), plus it offers you the flexibility of being able to make regular and one-off withdrawals.

Stocks and Shares ISAs are intended to be longer-term investments (5-10 years), so they can potentially yield better returns than a Cash ISA. However, depending on how long you’ve had the Stocks and Shares ISA and when you withdraw money, as with any investment linked to the stock market, there is the potential that you could get back less than you put in.

Setting up a savings plan is a bit like raising a child – you’re in it for the long haul! So, check out all the details, weigh up the options and make an informed decision that you’ll feel comfortable with for the next 5, 10 or even 25 years. For more information about our product range read more at forestersfriendlysociety.co.uk

Please note:

Tax rules may change and depend on individual circumstances.

Inflation could erode the value of your money over time.

The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser, which you may have to pay for.

Keep your children’s money out of the taxman’s reach

Did you know that you could be taxed on interest earned by money that you’ve given your children? Here’s how to mitigate this and also how to make your children’s savings (and earnings) as tax efficient as possible

First things first: tax allowance

Children have exactly the same income tax allowance as adults – £10,600 in the 2015/16 tax year. While few will earn this much over the course of the year, they could still find themselves paying tax often unnecessarily on savings, investments and earnings as follows:

Tax on savings

Although children can receive interest on bank and building society savings accounts tax-free, it’s usually taxed before it’s added to an account.

What you can do: You just need to complete a form – R85 – to register a child’s interest as tax free. You can get this from their bank or building society or download it from HMRC.

If your child has an account and you haven’t already done this, don’t worry, you can claim the tax back. You’ll need another HMRC form – this time it’s an R40.

Tax on savings given from parents

As a parent you also need to be aware that if your child earns more than £100 interest on money you’ve given them (or £200 if both parents have given money), the taxman will treat this interest as yours and tax it accordingly.

Although interest rates are low at the moment, they may go up. If they increased to 5%, a child only needs £2,000 in their account to earn £100 interest a year.

What you can do: If you plan to give your children money that’s likely to earn this amount of interest, consider putting it into a tax-free savings plan instead.

Tax on investments

Although you need to be 16 years old to hold investments (children can open a Cash NISA at 16), there are a variety of investments that parents can hold on behalf of their children before they reach this age (after all, the earlier you start to save, the better).

What you can do: Invest in one of the many tax efficient investment plans available, which will potentially save money both before and after your child reaches 18.

Tax efficient investment options

If your child has a Child Trust Fund, you could top-this up, up to the current annual limit of £4,080 for the 2015/2016 tax year. If they don’t you can take out a Junior ISA for an under-18 year old. These also allow you to pay in up to the 2015/2016 allowance of £4,080 in stocks and shares and/or cash.

Or you can take out a Child Tax Exempt Savings Plan. These are long-term saving plans offered by friendly societies, such as Foresters Friendly Society, that allow you to save £25 a month for anything from 10-25 years. You can even arrange for them to pay-out on a special birthday, such as their 18th or 21st for example.

Both Junior ISAs and Child Tax Exempt Savings Plans offer several advantages:

  • The cash sum paid out is tax free
  • Any interest is paid free of tax
  • There’s no further tax to pay on dividends
  • There’s no capital gains tax to worry about on profits when they cash in the investment
  • They are also great for parents as the £100 rule doesn’t apply – so you could use these to put money away for your child’s future without having to worry about being taxed on the interest.
  • Plus, a Child Tax Exempt Savings Plan can be held alongside a Child Trust Fund or Junior ISA.

Tax on earnings

While it’s unlikely any part-time work on its own is going to take your child’s earnings beyond their tax free allowance its good to be aware of how it could affect them should the need arise.

Without a tax record, an employer will just pop them onto an emergency tax code until the tax office has worked out the correct code, which means they could pay tax unnecessarily.

What you can do: If you’ve pushed for a correct tax code, this may get sorted out while they’re employed, and their employer will be able to refund any overpaid tax through their pay.

But if it’s not sorted before they leave a summer job, they’ll need to claim it back from HM Revenue & Customs (HMRC) by completing a P50 form. To get one, contact HMRC or download it from their website. HMRC also has a useful calculator to help you work out if your children (or you!) have overpaid tax.

Please note:

This blog is based on our understanding of current tax rules and is intended to provide information, not financial advice, to help you make an informed decision about tax-efficient savings and investments.

Tax rules may change and depend on individual circumstances.

The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser. You may have to pay for this advice.

How to Teach the X-Box Generation Essential Money Skills

My Money Week: It’s game on when it comes to teaching the X-Box generation essential money skills

At one time, the only thing computer games and finance had in common was Mario collecting coins from his defeated enemies. Now, smartphones, tablets and gaming devices are an everyday part of family life even when it comes to managing your finances.

You probably wish you could get your junior gamer to put some of the time they spend clicking and swiping to get to the next level on Candy Crush Saga or Angry Birds to better use.

Here’s where the clever, colourful, interactive world of educational apps and websites comes in. If you’d like your offspring to become financial whizz kids in the real world, start them off in these virtual ones, where they can learn important money skills without even realising you’re trying to teach them something…

1. BEST FOR: Learning how to set and reach financial goals

APP: GOLDSTAR SAVINGS BANK (Ideal for 8-16 year-olds)

The Goldstar Savings Bank teaches that financial planning can help children get what they really, really want. Kids decide on something they’d like to save up for and agree a monetary value with their parents for specific Home, School or Leisure tasks or activities – from keeping their room tidy to getting good marks. The app charts tasks on a week-to-week basis so children can see their progress to spur them on to reach their target. A great idea that has received a thumbs up from online communities Mums Business Directory and Mums in the Know, as well as The Guardian.

Try it out here.

2. BEST FOR: Showing how saving money can make you more money

WEBSITE: ROOSTERBANK (Ideal for 8-16 year-olds)

This is an online ‘piggy bank’ that gives children their own personalised account, from which they can keep track of their pocket money. A dashboard shows how much they have and lets them set saving targets – for example, for a new pair of trainers. As an incentive for them not to splurge, the more they save, the more ‘Roostie’ interest they earn, which can be exchanged for prizes.

Open a virtual account here.

3. BEST FOR: Introducing children to the concept of debit cards

WEBSITE/APP: GOHENRY (Ideal for 8-18 year olds)

Created by parents who wanted to teach their children how money works in the real world, GoHenry is a website and app which gives children real money on their first debit card, under the control of ‘The Bank of Mum and Dad’. Essentially, parents choose how much is available to spend on the card, how much can be spent per day, and where it can be spent. A great app to help your child figure out for themselves how best to manage their pocket money.

Find out more here.

4. BEST FOR: Going right back to financial basics…

APP: TEACHING MONEY (Ideal for 5-11 year olds)

A great tool to introduce children to the everyday basics of using money, this app aims to support what your little ones have learned in the classroom, including how to understand that different coins and notes have different values – a tricky concept to master for young children. Activities include counting up coins, giving change, and matching coins to correct values.

Start counting here.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

5 ways to teach children about saving in Global Money Week

This week is Global Money Week, which focuses on a subject we care deeply about: teaching children about money. We asked MyBnk.org, the UK organisers, to provide some helpful tips for parents to help with your financial education endeavours …

Our recent ‘Saving for Children’ survey, which we will share more on very soon, produced lots of interesting results but two of the most striking facts to come out of it were that:

  • 77% of 16 to 18-year-olds said they learnt the most about money from their parents.
  • 83% of this age group feel there isn’t enough finance education in schools

‘Save today. Safe tomorrow’ is this year’s Global Money Week theme. It’s clear that parents have a vital role to play here and with this in mind, MyBnk.org, Global Money Week’s UK organisers, offer these 5 helpful tips for teaching children about money:

1. Learn to earn

Place a value on work or chores for a reward, then identify savings goals together and agree steps on how your children can reach them.

2. A lesson in family finances

Eighteen year-olds living independently for the first time receive quite a shock when confronted with the realities of managing a household budget. You can demystify this if you sit down and show them your budget and outgoings, demonstrating how you keep the lights on and the fridge full!

3. Understanding wants vs needs

Many think if you understand this difference (and compound interest!) you are set for life. A need is something you can’t live without. A want is something you would like, but not having it won’t cause a real hardship.

Ask your child or grandchild to write down the last five things they spent their money on, or which were bought for them and then discuss these with them to work out which definition applies to each item.

4. Demotivators

Based on the Money Saving Expert approach, this concept works just as well for young people. Ask your child or grandchild to look at one of their normal expenses, such as a drink, snack or magazine, then multiply this by the frequency (eg 365 for daily expenses or 52 for weekly ones) and compare the total with what they could have had instead such as a new phone, or the beginnings of a savings pot for future use.

5. The art of patience

‘Would you rather have one treat now, or two treats later?’ Delaying gratification – it’s a simple yet effective proposition for parents to put to their children.

Global Money Week resources and competition

There are further opportunities and resources available to help teach children and young adults about money during Global Money Week, which is supported in the UK by Mybnk.org in association with Children and Youth Finance International. The theme this year is ‘Save today. Safe tomorrow’, which is obviously close to our hearts!

London Museum and London Stock Exchange are involved, as well as other organisations: here’s a summary of what’s going on and the resources available, including a competition for 9-18 year olds.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

Five Fun Board Games That Help Teach Children About Money

Christmas gift ideas that will please the kids, while you enjoy the fact that they’re learning valuable lessons about how to manage money

We believe it’s really important for children to start learning about money as early as possible, and games are a great way to start. There are some great apps around but don’t forget these classic board games, too. They can make super Christmas presents that you can all enjoy as a family – the children won’t even realize they’re learning anything!

BEST FOR: Learning about budgets & living expenses

Payday (ideal for 8 years to adult)

Players take turns moving around the 31-day calendar board, dealing with various financial events and choices along the way. Bills, loan payments, lottery tickets and, of course, the eventual payday – players have to deal with all of them and the wealthiest person at the end wins. Lots of fun and a great way to introduce the concept of budgeting and living expenses.

BEST FOR: Learning about cash flow

Monopoly (ideal for 8 years to adult)

We don’t need to tell you about Monopoly – surely it’s familiar to everyone – but perhaps you haven’t appreciated all the useful financial lessons it conveys? Players have to balance cash flow by earning income and saving, deal with financial blows such as taxes and emergencies, and learn about financial negotiation as they do deals to acquire cash for private mortgages when funds get low. Now, who’s got Park Lane?

BEST FOR: Introducing the complexities of finances in real life situations

The Game of Life (ideal for 9 years to adult)

Like Monopoly, this has been around for generations and is another great family game. Players move around a board that breaks down an entire lifespan into a series of choices and chance, from education and career choices to the effects of tax, overspending and investing. It’s a great way to learn about financial choices in life.

BEST FOR: Making a positive association between earning and pocket money

Money Bags (ideal for 3-9 years)

Children earn money by completing the household chores detailed on the eye-catching board and get paid for them – which is just how it should be done in real life! Players have to choose the right coins to make up the payment, so it also teaches them how to recognise coins and work out their money.

BEST FOR: Learning the value of coins and how to give change

Pop to the shops (ideal for 4-8 year olds)

In this game children take on the roles of both shopper and shopkeeper. They move around a village buying items from different shops, depending on the card they pick up and the roll of the dice. Players need to work out the correct coins to pay and how to give change, too. You can even encourage the art of polite conversation between shopper and shopkeeper!

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.