Child trust funds can get on JISA bandwagon ...from 2015
When it comes to Individual Savings Accounts (ISAs), I do wonder if the Treasury realises what a good thing it has.
From their launch, ISAs have proved incredibly popular. You put the money into a savings account or into shares, and it grows tax-free.
Tens of billions of pounds have been invested in ISAs, and the easily understandable tax-free wrapper has almost single-handedly kept the UK savings culture afloat.
In addition, it has created thousands of jobs in the fund management and banking industry. Personally, I would adopt the ISA framework as the way forward for pension saving in this country.
But no matter how much I like to big up ISAs, I feel the Treasury – of whatever political colour – is not much of a fan.
When ISAs were introduced, the then Chancellor, Gordon Brown, suggested it was only a temporary construct. Fortunately, that was backtracked on.
Before the most recent Autumn Statement, there were rumours that total ISA savings were going to be capped at £100,000, thereby punishing long-term savers.
Meanwhile, there has been the mishandling of Junior ISAs, introduced to replace child trust funds (CTFs), which had frankly been a monumental mistake.
Government officials would gift parents vouchers to be placed in CTFs, which would then hopefully grow over time.
Not only did this favour the financially very literate and those with money already, but it also cost a small fortune.
As soon as the chill winds of credit crunch landed, CTFs were dead. JISAs, on the other hand, didn't enjoy any state handout.
Parents understood them, and had confidence in them. However, for some bizarre reason, they could not roll the two products together. Now, finally, at Christmas, the Chancellor has decided to allow money in CTFs to be transferred to JISAs.
Parents will be able to leap out of the bureaucratic, expensive universe of CTFs into JISAs. The only pity is they will have to wait until April 2015 to do it.