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Start saving for your kids now with a Junior ISA, urges Confused.com

With November 1 bringing about the launch of the new Junior ISA scheme, Confused.com is urging parents to start saving sooner rather than later.

If they do, the comparison site claims parents could have enough to buy their child his or her first home at the age of 18.

The Junior ISA is a tax-free savings account for children and is designed to replace Child Trust Funds (CTF). It allows parents to save up to £3,600 a year for their children tax-free.

Once the ISA is opened, the funds become locked in until the child reaches 18. Until then, the parent can move the ISA around to different accounts to take advantage of the best interest rates.

With an interest rate of 6%, parents could save more than £116,000 in 18 years if they deposit £300 a month. With many first-time buyers struggling to get a home, Confused.com claims the Junior ISA could provide a “lifeline” for many.

Chris Griffiths, head of savings at Confused.com, says: “We all know saving for your child’s future is important, as it can really make a difference as they enter adult life.

“Even putting aside a small amount each month will soon mount up to a sizeable sum by the time they’re 18, when it can really help open doors by providing the finances to fund things like their first car, a house deposit, university fees or gap years abroad.

“Consider the different accounts available and weigh up what is the right choice for you and then shop around on comparison sites to find the best interest rates available.

“Set up a regular payment if you can to keep the pot growing and remember to check the market each year to ensure you still are getting as a good return on their savings as you can, transferring the account if it will earn more elsewhere.”

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