Good news for child savers - CTF transfers allowed - Savings - News - Moneyfacts

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Good news for child savers - CTF transfers allowed

Good news for child savers - CTF transfers allowed

Category: Savings

Updated: 23/12/2013
First Published: 23/12/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Chancellor George Osborne has just announced plans that will allow savings held in Child Trust Funds to be transferred to Junior ISAs (JISAs), giving child savers of any age the chance to take advantage of the better rates that can be achieved.

The news comes as welcome relief and will be a boost to those parents who were disappointed at the lack of announcement during the Autumn Statement. The changes are due to come into effect from April 2015 and will benefit some 6.1 million children who currently hold Child Trust Funds, and it means they could get access to better products, reduced fees and a better return on investment.

Child Trust Funds (CTFs) have all but become defunct since JISAs were introduced in 2011, but the rules that restricted transfers between the two types of account has meant millions of children have since been losing out – providers have been focusing on the new product, and therefore the choice of investments and interest rates offered on CTFs are paltry in comparison to JISAs.

Figures from the Treasury show this imbalance – in November, the best rate for a CTF was 3% whilst for a JISA it was 6%, so the announcement that funds can be transferred between the two is great news for those stuck in poor-performing accounts.

Sylvia Waycot, editor of Moneyfacts.co.uk, comments on the announcement:

"It is not only excellent news that savings held in Child Trust Funds will be allowed to be transferred into Junior ISAs, it is also the right decision. The last thing we need is a two-tier system for children's savings accounts.

"All children should be able to get the best return on their savings and shouldn't be limited to inferior accounts just because of the date they were born."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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