Martin urged young people aged 16 and 17 to open up an ISA account and put in £1 as the minimum age you have to be to get one is rising from next month
Martin Lewis has issued a warning to young savers ahead of a major change to ISA rules next month.
The MoneySavingExpert.com founder took to social media to tell those aged 16 or 17 to put £1 into an ISA (Individual Savings Account) now. This is because, from April 6, the minimum age to open a cash ISA is rising,
An ISA is a type of savings account where you can save up to £20,000 each tax year and you don’t pay tax on the interest earned from your savings. At the moment, you can open an ISA account from the age of 16, but from April 6, the start of the 2024/25 tax year, this is going up to 18.
Martin urged young people and the parents of young people to consider opening an ISA now and putting in just £1. However, he did note that many ISA accounts already can’t be opened by under-18s, although one major exception to this is the Virgin Monday easy-access ISA.
In his post, Martin explained: “16/17-year-olds consider putting £1 in a cash ISA NOW… From 6 April, the min age to get a cash ISA rises from 16 to 18 – though in reality many ISAs already don’t let under-18s open them. An exception is Virgin Money (5%). “
Virgin Money’s ISA pays 5.01% interest and can be opened and managed online. You can only withdraw money from this account three times a year but the interest rate will drop to 2% from the fourth withdrawal. Martin said it was a good idea to open one before the change, as if you do you will still be able to contribute £20,000 between April 6 and next April. Even if you don’t use it, it could be very handy to have.
Martin added: “So consider adding £1 now, as once open you’ll still be able to contribute £20,000 a year to it over the next two years. And while pointless for many, just in case you come into big money, so that your savings are taxed, it keeps the option open and you don’t lose anything by doing it.”
