IMA calls for govt contribution to Junior ISAs

The Investment Management Association (IMA) has written to the Treasury urging the government to consider providing contributions to Junior ISAs at birth.

Junior ISAs were launched in April and are open for any children without child trust funds (CTFs). They belong to the child, cannot be accessed until the child is 18 and convert into an ISA on adulthood.

However, unlike their predecessor child trust funds (CTFs) which closed in January this year, there will be no government contribution.

The IMA is now urging the government to "prioritise the reintroduction of some form of contribution at birth when the economic environment begins to improve, at the very least for families on low incomes."

Also raised were questions over the application of simplified due diligence on Junior ISAs, which the government intends to add to the Money Laundering Regulations.

The trade body asked for clarity on how due diligence would apply when 16 and 17 year olds may have an adult ISA, subject to full money laundering requirements, and a Junior ISA, subject to simplified due diligence, at the same time.