child trust fund

robin61

My 10 year old has a child trust fund with The Children's Mutual. It is invested in their Insight Investment Foundation Growth Trust. It grew from £268 in May 2005 to £448 in December 2013. So using an on line compound interest calculator I think that has given her a growth of about 6% per annum.
I put another £2k into it for her earlier this year as we were only being offered 2.5% for another 5 years with here national savings bonds so I cashed these in and put them into thee Child trust fund.
She was recently given £5k and at the moment it is in here Lloyd's bank account getting 3%.
Questions- I am thinking that I will put the £5k into the Child Trust Funds as well.is this a good thing to do ? Or am I allowed to open a Child ISA with another provider if there is someone else out there who is likely to offer better performance ? I think I remember reading that she can't have an ISA if she has a child trust fund but at some stage we would be able to transfer to a Child ISA ?
Advice appreciated.

robin61

OK I have been looking into this and it seems I would bust the limit this tax year if I wanted to pay more money into her child trust fund. I am now actually thinking in terms of opening a shares ISA in my own name and just letting her have the money when she is older and needs it.
I am after a shares ISA with a decent track record, low to medium risk with reasonable charges. Not really interested in making ongoing decisions myself so presumably some kind of tracker fund or similar.
Any suggestions please.?

Reaper

Yes you can't add it all in 1 year but you can split it over 2. Also next April you will be allowed to convert CTFs into Junior ISAs at which point you will have a lot more choice on where to invest.

So you could put the extra in your own ISA or child savings account for now then transfer it next year.

xylophone

If the money was given to your daughter then it is her money and should be held either in her sole name or in her name with you as bare trustee.

The limit for CTF has been increased to a maximum of £4000 in the CTF year (which as you will know does not necessarily align with the tax year (unlike the JISA). You can therefore top up the CTF as appropriate.

From April 2015, it is expected to be possible to transfer the CTF to JISA which will give more flexibility. More details of JISA here.

https://www.gov.uk/child-trust-funds/overview

You might want to use the likes of HL to give a wide choice of funds etc

You will be able to transfer the balance of the £5000 to the CTF/JISA then.

In the mean time, the 3% she is getting in Lloyds seems quite reasonable.

robin61

xylophone wrote: »

If the money was given to your daughter then it is her money and should be held either in her sole name or in her name with you as bare trustee.

The limit for CTF has been increased to a maximum of £4000 in the CTF year (which as you will know does not necessarily align with the tax year (unlike the JISA). You can therefore top up the CTF as appropriate.

From April 2015, it is expected to be possible to transfer the CTF to JISA which will give more flexibility. More details of JISA here.

https://www.gov.uk/child-trust-funds/overview

You might want to use the likes of HL to give a wide choice of funds etc

You will be able to transfer the balance of the £5000 to the CTF/JISA then.

In the mean time, the 3% she is getting in Lloyds seems quite reasonable.

OK thanks actually I'd assumed that the CTF rand over the financial year but it seems it is birthday to birthday so I will be able to get the full 5k into the CTF by January so that seems fine to me. I might well think about transferring the whole lot to an ISA nex year although the 6% pa the CTF has achieved seems quite good.