Following on from recent government announcements relating to the allowing of transfers from Child Trust Funds (CTF’s) to Junior ISA’s (JISAs) we are left searching for answers to questions about the practical process, it’s timescales and also any potential issues.
Noises have been made stating a potential date of 6th April 2015 as the earliest allowable transfer date. Many including Gavin Oldham from the Share Foundation have called for this date to be brought forward but no further announcements have been made on this to date.
Transfers could take place in a number of ways. The big question is whether a wet signature would be needed from a parent or registered contact. Currently pension transfers in the UK have processes where a signature-less transfer can be initiated under an advised arrangement; however signatures are generally needed for ISA Transfers. This really leads to a question about permitted timescales. Gone are the days where an average pension transfer would take many months to complete. A new system means transfers can take place within 5 days. Our hope is that CTF transfers will be a speedy and efficient process with the emphasis on making it easy for customers to action their wishes.
Potential issues include the ability of providers to continue offering Child Trusts Funds in the event they lose a large share of their existing business. One other interesting anomaly is around contribution dates. CTFs allow £3720 to be paid in per annum from the child’s birthday until next birthday. JISAs on the other hand run between tax years. This allows you to contribute £3270 between 6th April one year and 5th April the next. How this is to be unified is still being debated.