Junior ISAs represent a great opportunity for banks and other product providers – but outsourcing is the way forward.
HM Treasury has recently announced that the limit for Junior ISAs (JISAs) will increase from £3,000 to £3,600 from 1st November. JISAS will work in the same way as an adult ISA, allowing children to shelter £3,600 a year from tax. Likewise, as with adult ISAs, money can be invested in cash or stock market investments.
Clearly, this is good news for UK consumers and for children in particular, as a JISA will not only streamline and simplify savings for younger people, but will also allow them to maximise their savings and teach them about financial responsibility from a very early age.
ISAs have proved to be a popular product with savers ever since they were first launched in April 1999, and savings and investment 'wrappers' like these continue to offer savings in terms of both income tax and capital gains tax. As such, JISAs could have an important role to play in helping younger people save for university or a deposit for their first home.
At the same time, JISAs also represent a very exciting opportunity for UK banks and other vendors. Firms that do not currently have a Junior ISAs proposition – or that will need to change their existing proposition to take advantage of this new increased limit – should consider outsourcing in order to bring these products to market very quickly. In fact, under an outsourced model, many firms could bring a Junior ISA product to market in less than six weeks.
When used in this way, not only will outsourcing avoid the need to review and alter your current internal systems, (which often struggle to adapt to the ‘new world’ of product lifecycles anyway), but it will also slash the time that it would take to modify existing product engines and policy administration systems in order to support these products.
With any kind of new financial services product, time-to-market is everything. So if outsourcing can provide a much-needed shortcut, then why not take it?
