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Parents in danger of missing out on better options following changing Child Trust Fund rules

Press release - 23rd February 2015

  • From 6th April 2015 parents will be allowed to transfer Child Trust Fund accounts to Junior ISAs
  • Over half (58 per cent) of parents currently holding Child Trust Funds are unaware of the new transfer rules
  • There are over six million Child Trust Fund accounts in the UK

Savings and ISA provider Scottish Friendly is today calling on all parents of children aged between four and 13 years old to check the status of their Child Trust Fund (CTF) after research revealed that over half (58 per cent) of parents with children in this age group were unaware of changing legislation that will allow them to move their money into a Junior ISA.[1]

Following a widespread media and consumer group campaign, the Government announced last year that it will, from 6th April this year, give parents the option to voluntarily transfer any funds out of a CTF and into a Junior ISA (JISA).

According to HMRC[2], there are approximately 6.3 million Child Trust Fund accounts, while the research conducted by Scottish Friendly found that the current average CTF holds approximately £1,409 - meaning that as much as £8.9 billion currently held in these accounts could be moved to a JISA that will offer more flexibility and the potential for greater investment returns.

However, despite many parents being unaware of the forthcoming changes, when made aware, the vast majority of those surveyed in the Scottish Friendly report (80 per cent) said that they would be likely to take advantage of the new freedoms and move their child’s money to a JISA.

Calum Bennie, savings expert at Scottish Friendly, commented:

The new rules are voluntary but essentially give parents the opportunity to seek out accounts with better interest rates or better growth potential and allow for more flexibility when building a savings pot for their children.

There was a nationwide campaign to bring about these changes and allow more freedom in how parents save for their child’s future. However, no sooner was the campaign successful it seemed to drop-off the radar. So much so, that now there is a very real danger that if more isn’t done to let people know about the change in rules, parents may just end up leaving their money in a CTF where interest rates can be as little as 1.05%[3]. It took a considerable amount of persuading the Government to make these changes, so it’s important these hard won gains aren’t forgotten about.

While the decision on how to save for a child’s future is completely up to the individual, and dependent on a number of factors, it is important that parents are aware of all of the options out there so that they are able to make the best decision for their children. You wouldn’t just buy the first house you were shown, so why should parents settle for meagre interest rates on many CTF cash or poorly performing stocks and shares accounts when there are so many other options out there. Those parents who do plan to leave their money in CTFs should do so out of choice, not apathy.


  1. Research conducted by Reddot Research. Just over 2000 people were surveyed in February, 2015.
  2. Child Trust Fund Statistical Report 2012, HM Revenue & Customs, 2013
  3. This is Money, Survey of Child Trust Fund Interest rates, 8 October 2014

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