Posts Tagged ‘child trust fund’

Child Trust Funds can be moved to Junior ISAs from 2015

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Following consultation with various stakeholders, the Treasury has announced that savings kept in a Child Trust Fund (CTF) will be transferable to a Junior ISA from April 2015 – much to the relief of many who had hoped for such an announcement in the 2013 Autumn Statement and were disappointed when this failed to materialise.

A better deal for young savers with Junior ISAs

Up to 6.1million children stand to benefit from this change, which will see them able to take advantage of the benefits offers by Junior ISAs such as better returns on their investment, lower charges, and a wider choice of products.
Junior ISAs were introduced in 2010, following the closure of the Child Trust Fund Scheme. Up to £3,840 per year can be put into a Junior ISA without tax being paid on any interest or gains. When a child turns 18, the Junior ISA account automatically becomes an adult account.
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295,000 junior ISA accounts opened in first full tax year 2012-2013

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If you’ve got children, it’s natural to want to plan ahead for their future – to help them pay for education, their first home, a gap year, or other major expenses. Until recently, Child Trust Funds were one of the most widely-publicised options. Launched by the Government in 2002, families received up to £500 in public money to invest per child. However, this programme was scrapped in 2011 with the cost of the Government contribution proving too heavy.

Modelled on their better-known adult counterparts, Junior ISAs were launched in November 2011. Currently, parents, grandparents, relatives and friends can deposit up to £3,720 a year in a junior cash ISA, a junior investment ISA, or a mixture of the two. All growth and interest earned is tax-free.

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