A £38k ISA bonanza for teenagers of wealthy parents?

• From 1 July 2014, 16 and 17-year olds will also be able to have a New ISA of up to £15,000 in addition to potentially having a £4,000 Junior ISA
• This means 16 and 17 year olds can potentially have combined amounts of £19,000 invested for them in each of the two years ahead of going to university; a total sum of £38,000 per child

Comment from Jason Hollands, Managing Director, Bestinvest:

In last week’s Budget the Chancellor hit the jackpot with investors by announcing a major hike in the ISA allowance to £15,000 along with an end to the differentiated cash and stocks and shares allowances. From 1 July the enlarged “New ISA” allowance will allow savers and investors to hold whatever combination they choose to between cash, stocks and shares, including funds and investment trusts, vastly improving flexibility.

In the flurry of excitement over this very welcome news, it seems one group may have been forgotten in the various announcements: those 16 and 17 yields who are currently able to have a cash ISA of up to £5,760 opened for them, as well as potentially also having a Junior ISA.*

"We’ve ploughed through the Budget small print to try and find out what lays in store for these teenage savers, but couldn’t find a mention, so we have approached HM Revenue & Customs who have confirmed that from 1 July 2014, 16 and 17-year olds will also be able to have a New ISA of up to £15,000 in addition to potentially having a £4,000 Junior ISA. However, unlike their mums and dads, the £15,000 New ISA for this group will still be restricted to cash.

What this amounts to is that from July, 16 and 17 year olds can potentially have combined amounts of £19,000 invested for them in New ISAs and Junior ISAs invested for them in each of the two years ahead of going to university, a total sum of £38,000 per child. That of course is in addition to any investments made into Junior ISAs ahead of this.

That’s news that should bring cheers to affluent parents looking to build-up a college fund.

*http://www.hmrc.gov.uk/isa/bulletin57.pdf

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About Bestinvest:

Founded in 1986, Bestinvest has grown to become a leading private client investment adviser, looking after £5 billion of assets. We offer a range of investment services from the Online Investment Service for self-directed investors to Investment Advisory and Investment Management services for clients who do not have the time or inclination to manage their own investments.

All of our services are underpinned by rigorous research aimed at identifying those fund managers we believe will deliver long-term superior performance. We also have a team of expert financial planners with nationwide coverage to help clients with their pensions, retirement or Inheritance Tax planning. At Bestinvest, we pride ourselves on offering the highest levels of professionalism and expertise with transparent, competitive prices. We are pleased that our greatest source of new business is from personal referrals from existing clients.

Bestinvest has won numerous awards including Stockbroker of the Year, Low-Cost Sipp Provider of the Year and Self-Select ISA Provider of the Year at The Investors Chronicle and Financial Times Investment Awards 2013. Bestinvest also won UK Wealth Manager of the Year 2013 and Best Wealth Manager for Investments at The Investors Chronicle and the Financial Times Wealth Management Awards 2013.

Headquartered in Mayfair, London, Bestinvest employs more than 200 staff and has an extensive network of regional offices. For further information, please visit: www.bestinvest.co.uk