Advice needed: how to compare CTF with Junior ISA

Minty25

Hello All.

I have a Child Trust Fund for my 8 year old, and a Junior ISA for my 4 year old. Both are managed by the Children's Mutual.

I am pretty sure I can get a better deal for the £100 a month I invested by going to somewhere like the Halifax that gives a 4% return on Junior ISAs, but I want to know how I can compare performance.

The funds that the Children's Mutual uses is Aberdeen Foundation Growth. I have checked here
(oops, link not allowed, but its on Trustnet.com)

And it looks to be going up (not an expert, sorry!). But when I look at the figures for each account, they are not increasing very much at all.

Is there a good way for me to compare these accounts?

I just want to be sure that before removing the CTF and Junior ISA from the Children's Mutual and placing the funds in Halifax, that I will be getting a better deal.

Hopefully, I am not asking too much from this forum with this question.

Thank you very much in advance,

Confused Dad.

jimjames

It's not really a valid comparison to compare interest with investments. One is a guaranteed rate and the other can vary year by year depending on investment returns.

Long term the investment should outperform cash though which is why many children's accounts are investments not cash.


It may be that you are paying high charges with children's mutual that are impacting the returns and that moving to a lower cost fund would be better.

Minty25

As one account is a Child Trust Fund and one is a Junior ISA, should I move the CTF to a Junior ISA? They are both invested int eh same fund - does that mean they will perform differently?

Is this all set up to intentionally obfuscate?:mad:

I should add that both funds are stakeholder, not cash. And a lot of what I read on the web seems to compare JISAs to cash CTF.

If I have a CTF in stocks (not cash), does that perform as well as a JISA also invested in stocks?

xylophone

http://www.thechildrensmutual.co.uk/family-articles/savings/can-you-transfer-your-ctf-to-a-junior-isa/

is what CM have to say about the matter.

A child can have both a stocks and shares JISA and a cash JISA while the CTF was confined to one or the other.

It is possible to switch the CTF to a JISA within CM and it is possible to switch the CTF or the JISA to another provider.

Some parents may prefer to split the subscriptions between cash and stocks and shares so as to hedge their bets/provide flexibility etc.

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

http://www.telegraph.co.uk/finance/personalfinance/savings/11424472/Should-you-make-the-switch-from-a-CTF-to-a-junior-Isa.html

Minty25

Thank you, great links.

I will stay with Children's Mutual but transfer to JISA.

They charge 1% a year.