Should You Switch Your Child to Junior ISAs?

Should You Switch Your Child to Junior ISAs?

Junior ISAs or Junior Individual Savings Accounts are tax-free children savings accounts. The benefit of Junior ISAs is that the parent or guardian does not pay income tax or tax for capital gains if the value of account grows over years. For opening a Junior ISA account, the child must be a citizen of UK and under 18 years of age. The government offers flexibility for children who are UK citizens but live outside UK.

Two types of Junior ISAs are operating in the country. In Type 1, people invest cash money in the accounts. They do not pay income tax on these savings. In Type 2, people invest bonds and stocks instead of cash. The value of these bonds and stocks increases over time however, neither the parent nor guardian pays any capital growth tax on these investments.

The difference between Child Trust Fund and Junior ISAs

The government opened Child Trust Fund for kids born between September 01, 2002 and January 02, 2011. The government gave out £250 to parents with average to high income and £500 to parents with low income. The government gave this money in the form of vouchers. Parents deposited these vouchers in the children saving accounts. The account holders, friends, parents or guardians were allowed to add maximum £4,080 into their accounts. The government paid them interest on the money but the owners or parents did not pay any tax on their savings. The interest was allotted from child’s birthday in current year to the birthday in next year.

In 2011, government introduced Junior ISA, which replaced Child Trust Fund. Although Child Trust Fund is still operating but it is not allotted to kids born after January 02, 2012. The drawback of Child Trust Fund is that the parent, guardian or child cannot take out money before 18th birthday of child. After 18th birthday, the child gets a lump sum of the amount and is free to spend it.

Why You Should Switch Your Child to Junior ISAs?

The government has announced upon public request that CTF owners can now convert their CTF accounts into ISAs. The notice became effective from April 06, 2015. Junior ISAs have more benefits, lower taxes, and less competition. It is easier to open a Junior ISA account than opening a CTF account.

Before switching your child’s CTF account to JISA, it is important to remember that you cannot switch back to CTF from JISA.

If you have a cash CTF account then you should switch it to JISA because JISA offers more benefits than CTF.

If you have an investment CTF account then gather the rates from the account providers. Do not switch if the transfer rates are too high. However, if the transfer rates are suitable then the active investor may switch to JISA.

The process of transferring the CTF account to JISA is easy. The investor only needs to provide the details of their CTF account. The account provides deal with the hassles of process.

What Is Causing Your Grocery Cost You This Much

What Is Causing Your Grocery Cost You This Much

We all are aware of that mini heart attack that we get upon seeing our grocery bill. What makes it even more hurtful is that you thought it won’t be that much. So what is the mystery after all? What is it that is making our grocery cost this much?

Let’s see the reasons that make the price rising effect on our grocery bill and had us scrambling to make ends meet.

1. Getting lost in the store

How many of us get a little too twinkle-eyed by all the shiny groceries in the aisles? Yeah, we are all guilty. We often look at things and imagine their use in our head and the next thing you know you are throwing the package in your basket. The best way to avoid this is by creating a shopping list at home and then following it religiously with not a step out of place. It would help if you keep your eyes on the ground too.

2. Ready-made solutions

Yes, readymade solutions save a lot of time and tempt a large majority of us to make it a part of our grocery. So if you are buying for a month would it mean you’ll be buying 30 packages of ready-made food? And then you ask why the grocery is costing so much. Buying your own vegetables, herbs, and grocery would make it last more than a month and will cost you a lot less. With right hacks and preservation tricks, you can make your own ready-made packages at home.

3. Not considering a cheaper alternative

We run after brands as if our life depends on it and that is what causes our grocery cost so much. We never consider using a cheaper alternative. Sometimes the price difference is so high that it’s unbelievable yet the taste and functions are almost the same, sometimes even better.

4. Going to the store while starving

This may sound stupid or silly but when we go to a grocery store while hungry, it affects our shopping habits considerably. So here’s a tip, go grocery shopping in a full appetite.

5. Shopping with friends

Never go grocery shopping with friends or when you are in a mood to socialize while shopping. Most of the people are distracted with their mobile the whole time they are shopping or just talking non-stop and they barely know what’s going in their basket and what is being left behind.

6. Going to the pricey grocery store

It is our right to compare the prices and do our grocery shopping at a cheaper rate. Apples are same everywhere then what’s the point of buying them at a higher price?
If a large portion of your earnings is being spent on grocery items and your biggest expense is your food, it’s time that you re-think your budget and cut down your grocery costs. Now that you know the reasons, it should not be that hard.