Hot Topic – Transferring Your CTF to a Junior ISA

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Almost a year ago, we talked here about the unfairness of not being able to transfer Child Trust Funds to Junior ISAs.  It seems many others were upset about this too.

Just a quick reminder of the facts – in January 2011 all payments from the government stopped.  Not that surprising as it was part of deficit reduction plans and estimated to save more than £500 million each year.   The Junior ISA was then introduced as a replacement when CTF eligibility ended.

What happened next was the debate over whether an existing CTF could be transferred to a new JISA.  It was thought that CTFs would fade away and providers would stop paying attention to their service and over time as more JISAs became available, it was soon evident that CTF interest rates were usually lower than those offered on JISAs.  What made it worse was the fact the money was locked in generally until the child was 18 and even if a child didn’t have a CTF, if they had qualified for one then they couldn’t have a JISA.

Consultation soon followed where the Government acknowledged ‘that in the interests of fairness children with CTFs should not be prohibited from holding a Junior ISA if this account would better suit their long term interests than a CTF’.  The full consultation response was published in December 2013 and it was finally decided that ‘the transfer of savings from a CTF to a Junior ISA should be permitted at the request of the registered contact for the CTF’.  Fantastic news for all of those people (me included) who are stuck with their old CTF. The not so fantastic news is that we still have to wait over a year for this to actually happen;  April 2015 has been suggested as the earliest date.

That irritation aside, the government has said that transfers will operate in the same way as moving ISA providers currently so should be relatively painless.

Your comments, as ever, would be appreciated.

Best wishes and Happy New Year.

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