child trust fund and ISAs

[stuffthenonsense]

Hi, we were one of the last families to be entitled to get a child trust fund. We are now about to have another child, and are wanting them to be treated equally so were planning on setting up ISAs for both children, but throwing in a little extra for the younger to make up the difference.
Have just found out though, that as the older child has a CTF she CANNOT have an ISA! We cannot touch/move/return the CTF so she is essentially going to earn a much less favourable rate of return on any investment than the younger child.
Can anyone tell me why she cant have an ISA and how we can level the playing field for both children giving them the best rate of returns? Thanks.

Its not necessarily true that the CTF will return less than the Junior ISA. If they're both invested on the stock market they are both in a fairly similar position. The maximum you can invest in the CTF has been raised to £3600/year, same as the Junior ISA. The fees are comparable. Your eldest got the initial £250 voucher, whereas your youngest will not get that. So they are not too dissimilar.

Asking about 'best' rates of return when it comes to stock-market investments is the six-million dollar question. :) If we knew how the stocks would perform over the next 18 years, we'd all be billionaires. You could let the CTF lapse and open a straight unit trust for both of them, investing the same amount each month. You could invest in tax-free cash bonds for them - not wildly exciting rates of interest but very safe. Lots of choices.

Thanks for the advice. Much appreciated.