MSE News: Junior Isa plans unveiled

king100

Niksan wrote: »

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.

By which time I would have got my 7 year to sign a contract to state all savings to go into a savings account. Im mean like that.

When you say they can put into an ISA, say ISA allowance then is 10k do you mean they only put 10k a year into the ISA or can they transfer all the CTF funds into that 1 ISA at once.

This is when they are 18, as I assume that when you are 18 and have child ISAs these can be transferred into an adult 1.

Niksan

Yes, you'd have to follow the rules as if you had the cash in your pocket, so put in 10k and save the rest for the next year. And yes, according to Martins' blog, http://blog.moneysavingexpert.com/2011/03/31/junior-isas-warning-%E2%80%93-beware-using-them-to-save-for-college-funds-%E2%80%93-theres-a-big-glitch/ The JISA can be converted to an adult ISA as a whole.

king100

Whos stupid idea was this?

mike_lomas35

Help. I have 3 kids all with CTF's -are we saying that the allowance will now be £3000 to match the new isa (definately) and if so will be able to split the investment between cash and fund based investments, or will it have to be all in one or the other !!! Vey confused by the HMRC website!!!

Any ideas.......

Niksan

Unless the CTF details have been updated and Martin has failed to update his article, then the £3000 only applies to JISAs, http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

which states you can only put in £1200 per year, so as far as I'm aware CTFs remain the same as before. And you can't split between investment and saving funds.

gauly

Niksan wrote: »

Unless the CTF details have been updated and Martin has failed to update his article, then the £3000 only applies to JISAs, http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

which states you can only put in £1200 per year, so as far as I'm aware CTFs remain the same as before. And you can't split between investment and saving funds.

On the government website it says that the CTF will now allow payments of £3000 a year (to match the Junior ISA) but this seems to be the only change to CTFs.

The Junior ISA also has the advantage that it converts to an adult ISA (in the child's name) when the child turns 18 whereas the CTF just becomes a normal account. The Junior ISA also allows you to have two different funds, one in shares and one in cash but you can only have one CTF. There seems to be no plan to make these changes to CTFs or to allow transfers from CTFs to Junior ISAs.

The Junior ISA has the same rule as CTFs that mean no money can be withdrawn until the child gets to 18. I don't see what the advantage is to the government in not allowing transfers from CTFs to Junior ISAs - it's not as though it would cost them anything - can anyone else see the reasoning behind this?

ultrawomble

The draft legislation makes interesting reading:

http://www.hmrc.gov.uk/budget-updates/march2011/junior-isa-regs.pdf

It is anticipated that JISAs will have a £3K annual subscription limit and can be split between cash and S&S - and no allocation limits for either (unlike adult ISAs where a max of 50% can be held as cash).

cloud_dog

Niksan wrote: »

Unless the CTF details have been updated and Martin has failed to update his article, then the £3000 only applies to JISAs, http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

which states you can only put in £1200 per year, so as far as I'm aware CTFs remain the same as before. And you can't split between investment and saving funds.

The article states that the government will raise the CTF limit to £3K to bring it in line with JISA limits.

cloud_dog

gauly wrote: »

can anyone else see the reasoning behind this?

No.

Unsure why they wouldn't either just convert CTFs to JISA or allow a transfer.

The same happened with the Tory PEP and Labour ISA, eventually they were converted in to ISAs.

Percy1983

Didn't the CTF's get free money put in them while the ISA get nothing unless you fund it.