Please sign petition for CTF => junior ISA transfer

LeifGR

The children who have a Child Trust Fund are now stuck in that system, which is set to wither away as financial institutions lose interest in serving the relatively small community. Not only can these children not open a junior ISA, they are not allowed to close their CTF and transfer their funds tax-free.

This is a great inequality that is nut just unfair but unnecessary. The government could easily allow for transfers.

Please sign the e-petition that has been set up to force a Commons debate on the issue:

http://epetitions.direct.gov.uk/petitions/7468

Moderator: please consider making this a sticky!

mecrazybenz

Good call...just signed.

dunstonh

This is a great inequality that is nut just unfair but unnecessary.

It is best not to claim inequality as those children got a freebie from Gordon Brown. The children who can use the JISA got no free money. So, they were the victims of inequality.

oldvicar

I agree with the point of view - let CTFs become JISAs. In fact I'd force them down this route for simplicity.

I don't particularly like the epetition approach to everything though. We don't need a special debate about this in parliament - just someone to convince the Chancellor to propose the change in his next budget speech. Anyone up for that - Martin? :money:

LeifGR

dunstonh wrote: »

It is best not to claim inequality as those children got a freebie from Gordon Brown. The children who can use the JISA got no free money. So, they were the victims of inequality.

Of course. However I am looking at this long-term. The performance of CTFs hasn't exactly been stellar so far, not least due to the poor competition in the market. As the years go by, junior ISA populations grow and the relative attractiveness of serving the CTF population reduces, it is a fair assumption that the average return for junior ISAs will outperform CTFs more and more. The initial advantage of the Gordon Brown freebie will then be dwarfed by the junior ISA's better return.

StevieJ

I'm in although I do agree with Dunstonh on the original birthdate lottery.

utigers

dunstonh wrote: »

It is best not to claim inequality as those children got a freebie from Gordon Brown. The children who can use the JISA got no free money. So, they were the victims of inequality.

Yes my daughter got a 'free' £250, so far I have spent £100 on intial fee's, which wouldnt have happened under JISA's with HL. So the freebie doesnt look that good to me, and the more I contribute this problem just gets worst lining the pockets of financial institutes and undermining the reasons why these were set up in the first place.

Also chuck in very few funds to choose from makes those with CTF stuck and savings on annual charges dont happen either.

Inequality....bah.

ses6jwg

I don't agree.

There is plenty of stakeholder and shares CTF providers around.

Anyone who uses a Cash CTF is quite frankly, bonkers.

jevry1

My husband and I are worried about the stakeholder CTF we have for our eldest daughter. We are worried about the risks involved and have considered ceasing our monthly contributions. However we're worried that if we do that then the small amount of money we have in there will just get eaten up by annual fees as the account itself if not thriving/growing at present. Any advice please?

dunstonh

We are worried about the risks involved and have considered ceasing our monthly contributions.

What risks?

However we're worried that if we do that then the small amount of money we have in there will just get eaten up by annual fees as the account itself if not thriving/growing at present

Charges cannot eat the amount up. That is not possible.

Without knowing what risks you are on about, it is hard to comment. If you are referring to market volatility then nothing is really any different currently to what has gone before. Recessions always bring volatility. A typical period of a CTF would expect to see at least one, probably two recessions. So, this should come as a surprise. However, volatility can be great news for regular contributions. The lack of any real volatility during the 90s was one (of a number) of reasons why endowments suffered as they did.

jamesd

jevry1 wrote: »

We are worried about the risks involved and have considered ceasing our monthly contributions. However we're worried that if we do that then the small amount of money we have in there will just get eaten up by annual fees as the account itself if not thriving/growing at present. Any advice please?

Watch out for good investing times like the current one and choose those to add more money, when prices are reduced.

It's not easy to do that when the news has doom and gloom but it is when prices are discounted, so it's the time to be buying.

A stakeholder account can't eat the amount because the charge has to be a percentage of the amount invested and is capped anyway. Since stakeholder products are I think capped at no more than 1.5% annual charge the worst that charges could do over eighteen years is reduce the amount to 75% of its starting value. It doesn't take much long term investment growth to beat that.