Children get option to transfer CTF money to Junior Isa


Children get option to transfer CTF money to Junior Isa

RBS welcomes the news that the parents of more than 6 million children who have child trust funds will have the option of transferring the money held in these schemes to a Junior Individual Savings Account from April 2015.

Supporting individuals

24 December 2013

 

The move is expected to open up a wider range of investments - including the RBS Junior Isa - to the 6.1m children with child trust funds (CTF).

It could also make things simpler for parents who want to teach their children about the benefits of investing. Children with CTFs have previously been prohibited from opening a Junior Isa, meaning that some families include children with CTFs and others with Junior Isas.

Children born between September 2002 and January 2011 were given vouchers worth £250 at birth to invest in either cash accounts or equity based funds, and some received a further £250 voucher on their seventh birthday. Parents and other family members and friends could also invest money in a  child trust fund on the child’s behalf.

The scheme was then phased out and the Junior Isa introduced. Children with Junior Isas did not benefit from state donations, but had access to a wider range of savings accounts and investment funds.

An RBS spokesperson said: "This is great news for young savers and for parents looking to encourage their children to save. At NatWest and RBS, we believe that developing a good understanding of investment at an early age is really important to ensure better management of finances later in life. 

"While NatWest and RBS offer stocks and shares Junior ISAs and Child Trust Funds which invest into the same fund, we recognise that until now, children have had access to potentially different schemes, across the market, with different underlying investments and savings. The move to allow the transfer of money held in CTFs to Junior Isas will help to simplify saving for children, and provide a level playing field for everyone under the age of 18."

Up to £3,720 a year can currently be invested in a Junior ISA, and the returns are free of income and capital gains tax.

When a child reaches the age of 18, the account is automatically converted into an adult ISA.

Find out more about the RBS Junior Isa.

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