The Government has confirmed it will set the overall annual contribution limit for junior ISAs at £3,000.
The Government published the latest version of the Finance Bill today.
The Treasury says that six million children will be eligible for the junior ISAs, which will replace child trust funds, when they launch on November 1. It expects a further 800,000 to become eligible each year.
Children will be able to have one cash and one stocks and shares junior ISA at a time.Funds in junior ISAs will be locked in until the child is 18, at which point the accounts automatically become adult ISAs.
The Treasury says that if a parent contributes the maximum amount over 18 years, a child could see resulting funds of up to £80,000.
The Government will align the current CTF limit of £1,200 so that current CTF holders will benefit from the £3,000 limit.
Treasury financial secretary Mark Hoban (pictured) announced the Government would create a new tax-free children’s savings account in October.
Hoban says: “Junior ISAs are a great example of a simple, clear and jargon-free financial product that allows families to save and invest for their child’s future. They allow parents and family friends to contribute to children’s savings and will strengthen the savings culture. I look forward to seeing these on the high street in a few months time.”