Are there any compensation schemes applicable to the Moneybox Junior ISA?
Yes. The Financial Services Compensation Scheme (FSCS) has been set up to deal with compensation if firms are unable to meet claims made against them. The maximum claim that could be made under the Moneybox Junior ISA is £85,000. In addition, if any of the banks which are used for depositing cash balances are declared in default, each individual is entitled to 100% of the first £85,000 in total, in compensation for losses across all their deposits with that bank.
In the unlikely event that your child was to suffer financial loss directly because a fund manager of a Unit Trust or OEIC became insolvent, you will be able to claim under the investment business section of the FSCS. Each FCA authorised UK based fund manager will qualify for the investment element of the FSCS. If a fund manager becomes insolvent and is unable to return the money, your child will be protected for 100% of the first £85,000 held within it.
Further information about the compensation arrangements is available from the Financial Services Compensation Scheme at www.fscs.org.uk.
Please note that the compensation schemes described above do not cover a fall in the value of the Junior ISA investments.