CTF kids loose out to Junior Isa(15 Posts)
After some uncertainty the government announced recently the new Junior ISA scheme that will replace the CTF scheme. Anyone who signed up for the CTF will loose out - that's 6 million children and their parents.
Those of us that have signed up for the CTF showed that we had faith in the policy buy adding in extra money, and now we are being penalised.
It's not fair. Those that have the Junior ISA will have access to a wider range of cheaper stock market products. Their children will have more choices when they turn eighteen simply because they will have more money.
The CTF holders have only a handful of providers to choose from. There is access to the whole range of stock market products through Redmayne Bentley, for instance, but this comes at a price - exactly £5 a month in dealing fees if you have two kids with CTFs.
£5 a month easily eats into any stockmarket gains over a long period, especially, since one can only put in up to £120 a month per child.
Compare this to buying shares monthly in an Index Tracker that does not charge a dealing fee and the advantages are obvious. CTF holders have very limited access to Index Trackers. F&C, a CTF provider, has a few, but not as many as Legal & General. The latter can't be accessed through a CTF.
Parents should be allowed to turn the CTF into an ISA. I don't understand why this isn't the case. CTFs are not a big money spinner for the providers because the old £1,200 annual cap on contributions was so low.
There is still time. The Junior ISA regulation is still at the drafting stage. Will the Treasury listen? I want answers. If we shout loud enough they might!
There's nothing to stop someone halting contributions to the CTF and taking out a Junior ISA, is there? As I see it, those that got the free £250 have done very well out of the deal so far.
Eh? If you dislike the fact CTF's only have access to a limited amount of providers then won't a junior ISA be better for you then?
IIRC, the govt are making the limits the same for both JISA & CTF. So as Chil says, just open a junior ISA and take advantage of the new options rather than be stuck with the limitations of the old?
Or am I missing something? Why would you want to protest to give yourself limited choice?
As far as I know once you have signed up for a CFT, whether you set-up an account yourself or the government did it on your behalf, you can't then have a Junior ISA as well. One child can not have both. Only children without a CTF can have a Junior ISA.
The £250 bonus won't compensate over time for the access to a regular Junior ISA. Providers are already familiar with administering ISAs so I expect these providers will just extend their services to Juniors.
You're right, you can't have a Junior ISA and a CTF for the same child at the same time. The proposals were only published on March 31st, however. In the past, when things like PEPs and TESSAs went out, they could be merged into the new investment. According to the Family Investments website.. My child has a Child Trust Fund. Will they be able to transfer the funds to a Junior ISA? No. But the Government may decide to merge Child Trust Funds and Junior ISA products in the future.
A Tory Led government that cares about poor people is as rare as a ferret that cares about rabbits.
Same old camerooney, same old Tories
Gabby, the Junior ISA scheme is replacing the CTF and is generally perceived to be better.
I like your little joke though, Ken Dodd?
So - if I understand this right - the Tory junior ISA (which the tax payer doesn't contribute directly to) is more attractive than the Labour Child Trust Fund that cost the tax payer £250 per baby?
Really? That actually sums up 13 years of a Labour government nicely .
@Gabbyloggon.... the CTF was aimed at getting low-income people into a saving habit for their children but failed miserably because it was largely taken up by better-off people that would have saved for their children anyway. A very high % of low-income families didn't even cash the voucher because they didn't feel comfortable with the world of financial investments. I don't know about ferrets but leading horses to water did not make them drink. The Children's ISA is a sensible replacement, costs the taxpayer much less, and will appeal to the same set of people.
There's still time to change the proposal to let Labour CTF kids become Tory Junior ISA kids though. Why should they have to spend their life (up to 18) as labour kids? They will be better off under the Tory plan.
I'm with chil - how can £250 "free" money be a bum deal Sorry but you have an unrealistic expectation.
Tory/Labour bashing aside, it really is unfair that anyone currently holding a CTF is NOT ALLOWED to convert it to a Junior ISA as things stand.
CTFs are now only operated by a narrow range of providers, within a narrow set of parameters. Junior ISAs, similarly to adult ISAs will be invested over the whole market allowing a full range of financial opportunities and the ability to grow your childs money into so much more.
People with CTFs should be allowed to convert to a Junior ISA should they choose.
The chances are that it will be arranged so that the CTF can be upgraded to the new ISA. That would be consistent with other government-driven financial products of the last 20 and 30 years. They are introduced and, in due course, old products can be converted. I don't think it's worth getting up in arms at this early stage.
The Daily Mail's campaign seems to be bearing fruit. This morning 'This is Money' reported that there is a 'glimmer' of hope that the new draft CTF rules due to be published next week will allow CTFs to be transferred to Junior ISAs. The paper's had a campaign going on for months. I'd drop a few words on their site if I could to offer support but the comment service isn't working.
I think the Daily Mail's 'campaign' is pushing against an open door, tbh.
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