Child Trust Fund fee of 1.5% - are there better alternatives?

[mytortoisehasgonemissingnow]

DS2 has a child trust fund with Foresters. The thing that stands out is that they charge 1.5% per year for doing naff all so far as I can see.

Are there others with better fees?
Would a junior isa involving stocks and shares have a fee just as high?
is the only alternative a junior cash isa?

all help appreciated as mse hasn't updated its page since May and lots has happened since then re interest rates and stock market volatility.

1.5% is the max charge for a CTF and it's too high (I was paying it for years before I realised). I transferred my son's CTF to a Junior ISA with Hargreaves lansdown (because they do CTF to JISA transfers - not all companies do), then moved the JISA to Fidelity, because their fee is 0%. Through fidelity the money is invested in a Vanguard Lifestyle fund, so just before my son turns 18 I'll move the whole fund to Vanguard.

Brocken you’re an angel :)

By the way, if you're paying a 1.5% fee its probable that your Foresters CTF is already in stocks and shares, not a cash ISA.

This screenshot is for Foresters main CTF so likely to be the one you have (unless they acquired yours from another provider). It's a managed fund, hence the high fee. If you move it to HL/Fidelity, you'll have a big choice of funds to invest in - either managed funds or passive tracker funds, with different fee options. I chose a Vanguard tracker fund, because managed funds tend not to outperform trackers.

Excellent. Yes you are right, I got confused whilst posting. It was a transfer from an ethical investment fund so yes it’s stocks and shares. I think it’s FTSEgood tracker.

Ironically I put my kids’ child trust funds in ethical investments blissfully unaware that my own pension was mainly invested in BAT (tobacco).

….just looking at Fidelity and also Nutmeg….

his bank accounts are with Santander. I wonder whether I could just use their cash JISA as the intermediary account. Can you transfer CTF to Cash JISA to Stocks and shares JISA?

ds2 wants to put it in stocks and it will be good experience for him I think.

Its not obvious from the blurb, but Fidelity don't currently convert CTFs to JISAs, which is why I did the move in two hops, via HL.

For clarity, although Fidelity have no platform fee for JISA's you will still pay any fees associated with the fund you choose. We pay 0.22% for a Vanguard Lifestyle fund, which is a tracker. (As Fidelity have no platform fee its ironically cheaper to have a Vanguard fund with Fidelity than with Vanguard, until the JISA converts to an adult ISA at age 18).

You aren't allowed to hold a CTF and JISA at the same time, so I'm surprised you have a cash JISA. See here, half way down page: www.gov.uk/junior-individual-savings-accounts

Sorry if i misinterpreted - perhaps you meant Santander's JISA, not your child's JISA. In that case, just check Santander's website to see if you can transfer the CTF in.

Something worth being aware of - if you transfer it to a cash JISA it will be converted to cash, with no option of leaving it invested in the current range of stocks/shares. In contrast, when I transferred ours to an HL S&S isa, HL asked whether I wanted to convert it as cash (taking about a month) or as stocks/shares (taking about 3 months, and with no guarantee that they'd be able to do it if they didn't offer the same stocks/shares on their platform). I chose the cash option. But the downside of converting to cash is that you're out of the market for a couple of weeks so might miss out on any rises (though luckily in my case I missed out on a fall in the market instead 🙂).

To be clear, the fact that your child already has a Santander account wouldn't be relevant, because the JISA would be attached to your account (in your child's name) not his account.

Be warned, DS's CTF transferred to him when he hit 18 so if you're using it as long term savings be aware they could have access.

We didn't add in anything, it was around £360 and he spent it going to a festival for a few days, had a great time and thanks to Gordon for paying for the experience 😆

I think you’re a good person Bricken
thank you!