John Lewis ISAs – all you need to know about the high street giant’s new money product
Pension: Jordan Gillies share tips on planning and investing
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Aimed at consumers who “otherwise would not consider investing”, these deals should attract attention from those who know and love the brand and are thinking of dipping their toes in the investment waters. “You don’t have to be an experienced investor because we have selected the products our customers have told us are most relevant to them with a level of risk they are comfortable with,” a John Lewis spokesperson said.
How does the John Lewis ISA stack up?
The good news is that you only need £100 to start investing and you can save a total of £20,000 a year.
As it’s an investment ISA, your cash is then invested, so you won’t pay tax on any returns you make.
However, unlike savings accounts, investing has no guaranteed interest rate.
So it’s possible that you could lose money although ISAs are one way to get a better return on your money and investments do tend to go up over five years.
Parents can take advantage of this new Junior ISA
With the new Junior ISA from John Lewis, parents, grandparents and carers can start a little nest egg for their children for them to withdraw when they turn 18.
Just like a standard ISA, this is a great way to save for your kids’ future allowing you to put £9,000 away every year.
If that’s affordable, after 18 years your child should have a nice sum but there are some fees to take into consideration.
The fees on the account mean a customer will pay anything between 0.72 to 1.12 percent of their investment back every year to Nutmeg, the investment company behind the ISA.
Some investment firms charge less, so it’s worth having a look around before making a decision.
John Lewis financial services director Amir Goshtai said its product is a good first step for people who were looking for a simple solution to investing.
“Our products allow people to put money aside and to take that first step into what is often perceived as the complicated world of investments,” he said.
The third John Lewis deal is a standard investment account, which lets you pick your own investments.
It’s only available to investors who have already invested £20,000 into an ISA in one year.
Meanwhile, a recent Natwest survey found that Three quarters (76 percent) of parents and guardians with children aged under 18 are saving or investing for their children’s future.
However, figures also showed that 83 percent were saving in cash and not putting it into a savings or investment account.
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“It’s encouraging to see how many people are saving and investing for their children,” Peter Flavel, CEO of Coutts and NatWest’s wealth businesses, said.
“But with so much of these savings being cash, the concern is that the customer isn’t aware that the impact of inflation means the purchasing power of these ‘safe’ cash balances actually goes backwards over the longer term.”
Nearly a fifth (18 percent) of UK parents who are saving for their child are doing so by putting away cash in their own bank account, rather than in a child’s bank account or junior ISA the Natwest data also found.
Although well intentioned, this is not the most cost effective way of saving as more often than not, children’s savings accounts will have higher rates.
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