As changes are on the horizon for Child Trust Funds we ask the question: ‘How many Child Trust Fund providers will be affected by the new legislation?’
Media figures suggest that more than 6 million children currently hold CTFs. Whilst total cash figures vary, the Guardian newspaper have suggested that around £5bn of cash is in CTFs, of which under a third is in stocks and shares accounts and the rest held in deposit savings.
One of the reasons muted for a change in rules is to offer more investment choice or access to a wider range and potentially better savings interest rate. This would lead to the natural conclusion that there are more options under the new regime than the old one.
David Dawson, Savings Director at The Children’s ISA stated: ‘We were not involved in Child Trust Funds at their outset and set up The Children’s ISA Specifically to help parents with children eligible for Junior ISA’s. Now that the two schemes are being aligned we will be pleased to offer our junior ISA options to all parents’.
Government figures show that there are around 70 providers of Child Trust Funds currently operating in the UK. Fears are actually that this number will reduce as transfers away from them are allowed and revenue is lost. On the other hand many are pointing to products rather than providers being the difference. Cash rates with some banks who offer both CTF and Junior ISA accounts have more favourable JISA offerings. Charging structures, technology and fund options are a consideration on investment based products.
For more information on The Children’s ISA please visit www.thechildrensisa.com