MSE News: Junior Isa plans unveiled

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The Government has unveiled proposals for a tax-efficient junior Isa for kids to save up to £3,000 a year ..."

Read the full story:
Junior Isa plans unveiled

Percy1983

Sounds a good plan to me.

Niksan

Now only if we could transfer the CTFs to these JISAs.

ultrawomble

Its a shame that the £3k annual amount can't be split between cash and investment accounts. As such, the junior ISA is a cash only vehicle (because investment ISAs are only available to +18s) whereas the CTF can be an investment vehicle or a cash vehicle.

ultrawomble

Niksan wrote: »

Now only if we could transfer the CTFs to these JISAs.

But I believe you can transfer your investment based CTF to a cash based CTF. JISA in all but name?

Niksan

That's true, but as Martin outlines here http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

under the Banks may stop supporting CTFs bit. Currently both my children have none investment CTFs, and in my naivety I didn't think you could swap them around like an ISA (smacks self over head). But it would be better if you could move them to something that exists rather than no longer exists and reliant on banks to not take the biscuit.

gauly

Not only do I suspect that Junior ISAs will have significantly better rates than CTFs, there is also the advantage that when the child turns 18 they convert into an adult ISA while a CTF doesn't. Plus it is just inconvenient having different accounts for different children. Why not allow transfers from CTFs to ISAs - they are the same thing in all but name? Particularly weird since older children will be allowed Junior ISAs so only those born between 2002 and 2010 are not allowed them.

Dorastar

Hmm I have one who can have a junior ISA and one who has a CTF - from experience things like this cause trouble when kids are older. My olds got a pay in account for me and my bro when we were babies - his in Halifax account and mine through Canada Life. We both just kept them on then when the Halifax did their 'shares thing' he got enough to buy a car - mine wasn't even enough to pay for the insurance for a car Did make me slightly miffed tbh. We wont have any spare to pay in for our two once my pension costs go up and we lose Child benefit anyway and DD (9) has already told us she has shelved her uni plans in favour of writing her books from home as she can do her £9000xtable!

Gorgeous_George

Sounds like a scheme to give wealthy people more options to avoid paying tax. poor people won't have £3,000 to give their children each year.

Kids already have a generous tax allowance.

GG

king100

I have a question can a CTF be transferred at the end to an adult ISA.

Example

Son 7 years old, we put in £3k into CTF per year, thats £33k when 18, thats alot of savings to be getting taxed on?

Daughter nearly 2, 16 years 3k a year thats 48k to my kid when 18 again alot to be taxed on.

Niksan

Basically AFAIK, as soon as your child is 18 they get the dough, they then can put that into an ISA as you would normally, but no transfer I'm afraid unless they change the rules to make CTFs less restricting.

In a way I can sort of understand it, as I'm guessing with the JISA you can withdraw at any point, while the CTF is protecting the money the government put in, unless the JISA have the same rules as it can't be touched until they're 18.