NatWest has launched a new Junior Stocks and Shares ISA for parents and guardians wanting an affordable alternative to cash savings to help save for their children’s future.
The new JISA, available through NatWest’s digital investment services, NatWest Invest and Royal Bank Invest, allows up to £9,000 to be saved tax free every year up to the child’s 18th birthday. Customers can start saving from as little as £10 per month, which the bank hopes will encourage more customers to save for their children’s future and help to educate the next generation on the benefits of saving and investments.
“Starting a Junior ISA for a child is a really great way to give them a head start at the age of 18 and, as they get older, teach them about the benefits of saving for their future,” Nick Johnson, Investing Journey Lead, NatWest said. “We hope to encourage the next generation of investors and ensure as many people as possible have the right tools to help make their money go further..”
More than eight in 10 (83%) UK parents currently saving for their children are doing so in cash, according to research carried out by NatWest. Nearly half of which (46%) have simply opened a cash account. Only a quarter (23%) of UK parents are saving for a child via stocks and shares.
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NatWest’s new JISA offers parents an alternative to cash for long-term savings, helping to offset the impact of inflation and low interest rates on cash savings. Customers can choose between five different funds, managed by Coutts, offering differing levels of risk depending on personal appetite.
Mohammad Kamal Syed, Head of Asset Management at Coutts, said: “Our research shone a light on what we know is happening – that cash remains king. Unfortunately, only saving in cash exposes customers to the corrosive impact of inflation. In the current economic climate, the real-life purchasing power of your savings will actually decrease over time if held in cash.”
Syed says that Coutts feels it has a responsibility to raise awareness of how customers can make their money and savings work harder for them. “This is why we are giving customers the option to choose their own fund, rather than providing a default option,” he explained. “We believe that giving people the freedom to choose the fund that suits them will encourage more customers to start saving and increase engagement with investments more widely. We want to see more people aware of the benefits of investing and hope the JISA is one way to do that.”
Funds meet Coutts’ commitment to climate agenda
Each of the funds meets Coutts’ commitment to the climate agenda with stringent ESG criteria applied across all investment products. Coutts is a member of the Net Zero Asset Managers initiative, which means it has committed to achieve net zero across all its investments by 2050.
“We obviously want more and more people to understand the possible benefits of investing, but investments can have as much an impact on our climate as travelling or manufacturing, so we have a responsibility to make sure what we offer is as responsible as possible,” Syed said. “That’s why all our investments must meet strict criteria and are part of our net zero ambitions. This means when any client invests with us – through our JISA or any investment product – they have chosen to reduce carbon emissions, promote diversity and establish good working conditions for all.”
Over the last year 650,000 NatWest customers started saving for the first-time and earlier this year the assets under management across NatWest Group’s digital investing assets broke the £1bn barrier.
Customers can transfer existing Junior ISAs or Child Trust Fund products into the new JISA at no charge. NatWest also offers a range of savings products to help customers, including the Savings Goal tool in the bank’s mobile app. A Junior Stocks and Share ISA can be opened at any local branch, through the NatWest mobile app, or online.