Martin Lewis is encouraging people to take advantage of a current law before it changes next week.
The Money Saving Expert (MSE) founder has come up with a clever trick to dodge the upcoming law change, and it only costs £1 – which you won’t lose, but will actually get back with interest on top.
Martin explained this involves opening a Virgin Money Cash Isa – although other options may be available – and this advice is particularly aimed at parents and grandparents. He revealed from next Saturday, April 6, the law will change, preventing those aged 16 and 17 from being able to open Cash ISAs.
After April 6, people under 18 legally won’t be allowed to open a Cash ISA, even though they can right now, so you need to apply before the end of Friday. Martin advised listeners the best account to open is the Virgin Money Cash ISA, which currently allows 16 and 17 year olds to open an account.
He added you should do this because it gives you the chance to save tax free in the next two years, which you’ll lose when the law changes next week. Speaking to his BBC Radio 5 Live listeners, Martin Lewis said: “16 and 17-year-olds consider putting £1 into a Cash ISA right now if they haven’t already.
“Because from April 6, the start of the new tax year, the minimum age to get a Cash ISA, to open one, rises from 16 to 18. The reality is many cash ISAs do not allow under-18s to open one already. One exception is Virgin Money which is a top payer at 5% easy access interest” , reports Yorkshire Live.
He explained the benefits by adding: “If you put £1 in, now, and open your Cash ISA, if you’re 16, say, you will still be able to put money in next year and the year after even though if you hadn’t done it, you wouldn’t be able to open it so you couldn’t put money in a Cash ISA.
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“A Cash ISA is pretty useless for most 16 and 17-year-olds because you don’t need the protection from tax because you haven’t got the earnings, but it’s worth getting a quid in so that you have got the facility, in case something changed that meant you came into big money. It can happen.
“There are circumstances that I won’t say that I don’t want to tempt fate or be awful about, but it is worth having the facility in case you need it. There’s no cost to it because you put £1 in it’s going to earn 5% interest, even if you don’t add any more you still have the £1 plus the interest on top.”
He suggested: “Why not open the Virgin cash ISA with a quid right now so you have it as insurance policy in case you need it in the next couple of years.”
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