As Child Trust Fund laws change we ask the question why the media have labelled existing Child Trust Funds ‘Zombie Accounts’.
Recent users of this term include The Financial Times, The Telegraph and The Sunday Times. They have all referred to child trust fund money being trapped in zombie accounts paying low interest rates of with little fund choice.
The word ‘Zombie’ can relate to a rum cocktail, a film or a person involved in witchcraft but another definition gives reference to an person who is lifeless, apathetic or unresponsive to their surroundings. This gives an accurate reason for the term in this context. After it was decided that Child Trust Fund vouchers should cease many asked the question: ‘What now for the CTF’s already in existence?’ Until now the government response has been apathetic.
Whilst many claimed that Junior ISA’s offered higher interest rates or better fund choice than child trust funds, there was also the issue of what happens to the monies on maturity. With a Junior ISA tax free status could continue, with a Child Trust Fund this couldn’t happen.
Eventually, over the Christmas period in 2013 the government finally responded. Voluntary transfers will now be allowed from April 2015 and life can once again be breathed into lifeless accounts.
For more information on how to transfer to The Children’s ISA visit www.thechildrensisa.com