Child Trust Fund to Junior ISA

Discussion in 'Finance, Property, Law' started by Bad CO, Oct 5, 2012.

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  1. Bad CO

    Bad CO LE Admin Reviews Editor Gallery Guru

    Not sure how many people remember Gordon Brown's attempt to bribe the electorate by giving children £250 for simply being born, aka the Child Trust Fund (CTF)? This was one of the things (sensibly in my opinion) stopped by the new government but was still received by a lot of kids. In fact everyone got it, whether you wanted it or not.

    Kids born after that date can't get the CTF but they are able to take out Junior ISAs which are tax free schemes similar to the ones available to adults. Anyone with a CTF is ineligible for a Junior ISA meaning you have to stick with whatever scheme the money was in. Predictably the limited number of CTF providers are now in that classic bank game of slowly pushing interest rates down as they know full well that the money can't be taken out and they don't need to attract new business.

    Hargreaves Landsdown, who are a pretty top notch financial services provider btw, are trying to persuade the government that they should allow CTFs to be transferred to Junior ISAs. They've got a petition going which I'd encourage anyone with an interest in a kid born between 1 Sep 02 and 2 Jan 11 to sign

    >>> Linky <<<​

    P.S It's not one of those rubbish online government debate things.....
  2. Done and thanks for the Heads-up - hadn't seen the CTF interest rate issue before but I agree, it will erode with time.
  3. Bad CO

    Bad CO LE Admin Reviews Editor Gallery Guru

    Just discovered that the Treasury has announced a consultation to allow the transfer of savings from a Child Trust Fund to a Junior ISA. Anyone with money for their children stuck in zombie CTF accounts should be in favour of this!

    More information here:

    Note that you can email them at the bottom which I'd advise everyone to do. Consultation closes on 6 Aug 2013
  4. BiscuitsAB

    BiscuitsAB LE Moderator

    Anyone daft enough to put money into a child trust fund deserves all they get!
  5. Bad CO

    Bad CO LE Admin Reviews Editor Gallery Guru

    That's fine except when people first took them out no-one knew they were going to close the scheme. This then meant that financial institutions stopped offering competitive deals and started to ratchet the annual charges up. As you can't get your kid's money out you're then stuffed.

    Sent from my Nexus 4 using Tapatalk 2
  6. Biscuits, you are right, but unfortunately, Gordon has not got what he deserves (yet)!

    Thanks for the Heads Up Bad CO.
  7. Sympathetic_Reaction

    Sympathetic_Reaction LE Book Reviewer

    The problem was that if you didn't then the government would do it for you...and you still don't get access to the JISA son was born in the great period just as the system was closing down (so crap deals all round) but still running so you got less money (as they had cut the amount) but were still forced to invest it in a CTF.

    I've sent a response to the consultation and had a nice email reply back saying they had it.

  8. I am unsure as what to do if anything about this.I have never heard of it but being a family and friends foster carer this child trust fund was mentioned at my last review.

    The officer mentioned to my granddaughters social worker about chasing the child trust fund up and transferring it over but the conversation seemed to be between them so I did not take much notice.
  9. BiscuitsAB

    BiscuitsAB LE Moderator

    basically it was a stupid idea for this reason alone. The money is in the name of the child who acquires rights over it from age 16 and full access at age 18!

    I've seen people paying into them to the max each year and then the look on their faces when I explain great what would you have done with x times £000's at age 18?

    in the words of homer (Simpson) DOH!
  10. Ravers

    Ravers LE Reviewer Book Reviewer

    Not really, it takes a special kind of **** to blitz a few grand that their parents have saved up for them over the course of their lives.

    At 18 I got a modest sum from a post office trust that my grandfather had set up, it went towards my first car, a classic vehicle which I made money on when I eventually sold it. Out of respect for him, I would've never spent the cash on pissing up or a lads holiday in Ibiza.

    Both my brats have a pot of cash that we're slowly building up. The boy was born in 2010 so he has a CTF, if the chance arises we'll definitely transfer it to a Junior ISA for the reasons stated by Bad CO above. My daughter was born in 2012 so she's started out on a Junior ISA straight away. Our plan is to prop up the boy's CTF so that he doesn't dip out and they both get an equal amount.

    By my rough calculations we're expecting them each to get about 10 grand on their 18th birthday. If they decide to put this to good use i.e. University, property deposit etc. we'll double it, creating an additional incentive not to spunk everything up the wall.

    Let's face it, your little shits are gonna sponge off you and bleed you dry anyway, at least this way it's totally transparent. In 18 years time when my son comes begging for a new car, I can tell him to **** off because he's already got his fill.
    • Like Like x 2
  11. Any tips - without paying your fees?
  12. BiscuitsAB

    BiscuitsAB LE Moderator

    What on? Saving for your kids, yeah stick it in an ISA in your own name. Not that many people use their allowance each year, so theres always room for a 50-100 quid a month extra for the kids. That way you control the money and if the little darling turns out ok give them the money but if they turnout like you were at 18 tell them No!

    Or just do what I did my eldest said I want to go to Uni I said good, he asked will you pay for it I said "sod off, go earn the money yourself" which apparently to some makes me a bad person, but I know 2 things: 1. I'm £20,000 better off and 2. My lad now knows the worth of doing something for himself. I now know that I can trust him to be responsible and hardworking and have therefore installed him as Director in his own company as of yesterday ready for when he finishes his law degree this Friday.

    So if anyone wants their wills sorting or powers of attorney for themselves or elderly relatives or needs to protect assets via various trusts drop me a pm and I'll send him out to do it.
  13. I am torn with this,just recieved the info about where this cash is,there is £1500 in it at the moment,apparently looked after children get £100 a year paid into it.

    Shall I just leave it and give her the choice of whether she want's to add to it herself,fostered children get a fair bit of pocket money and she does save some.
  14. Belated thanks for the advice.