NatWest launches new Junior ISA as savers ‘exposed’ to ‘corrosive impact of inflation’

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The new Junior ISA (JISA) is available through NatWest’s digital investment services, NatWest Invest and Royal Bank Invest. It allows up to £9,000 to be saved tax free each tax year, as per the current HM Revenue and Customs (HMRC) rules.

This can be done up to the child’s 18th birthday.

Funds will be accessible by the child at age 18 with ability to manage the account at age 16.

This ISA offers customers five ready-made fund options, with varying levels of risk.

Junior ISA customers will be able to select one of five Coutts’ funds, depending on their chosen level of risk.

Each fund meets the bank’s stringent ESG criteria, NatWest said.

It is very important to be aware with investing, capital is at risk.

It comes as research by NatWest found that 83 percent of UK parents are saving for their children in cash which could mean they’re losing out.

Nearly half of which (46 percent), have simply opened a cash account.

The survey found only a quarter (23 percent) of UK parents are saving for a child via stocks and shares.

Nick Johnson, Investing Journey Lead, NatWest said: “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.

“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.”

NatWest said the new Junior ISA offers parents an alternative to cash for long-term savings, helping to offset the impact of inflation and low interest rates on cash savings.

Mohammad Kamal Syed, Head of Asset Management, 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.

“At NatWest we are focussed on trying to reduce the UK’s savings and investment gap.

“We have 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.

“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.”

On ESG, he continued: “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.

“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.”

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