CTF Query - Transfer?

lucy_w86

Hi,

My son has a CTF with Tesco which was taken over by Natwest a couple of years ago. I have read and heard about being able to transfer to an ISA but I am not sure if it's worth it or whether I should do it. Very confused.

Advice welcome please.

xylophone

What kind of CTF, cash or stocks and shares?

https://www.gov.uk/junior-individual-savings-accounts/overview

The JISA allows more choice in that the child can have both stocks and shares and cash if required.

The child cannot have both a JISA and a CTF.

You can transfer from a CTF to a JISA - you need to contact the new provider and ask them to arrange the transfer.

The highest paying cash JISA comes from the Halifax if the adult contact holds an adult ISA with them.

http://www.moneysavingexpert.com/savings/junior-isa

lucy_w86

I believe its shares as it says number of shares, unit price and overall amount.

xylophone

It is possible to transfer a stocks and shares CTF to a stocks and shares JISA if that is what you wish to do.

See http://www.moneysupermarket.com/c/news/how-to-transfer-a-ctf-to-a-jisa/0085961/

lucy_w86

Thanks

Can it not be transferred to a standard JISA? I am a bit worried as don't understand stocks and shares and I believe the price can go up and down.

xylophone

You could sell the shares in the CTF to realise cash and then ask the new cash JISA provider to arrange the transfer of this cash into the new JISA.

lucy_w86

I think what I am really asking is what's the best thing to do? Keep what he has? Transfer? I don't know much about stocks and shares so not too sure.

xylophone

http://personal.natwest.com/personal/investments/existing-customers/Child_Trust_Fund.html

Is this what you have? There is no information here about charges but presumably you have full information.

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

http://www.thisismoney.co.uk/money/investing/article-1587994/Junior-Isa-Child-Trust-Fund-How-save-invest-children.html

The above may be of interest.

Nobody on the board can give you advice - we can only comment and point you to sources of information.

How old is your child?

lucy_w86

Five years old.

xylophone

Your child is still very young and conventional wisdom is that over the longer term, a share based investment does better than cash deposits.

Some people might want to stay in the market for a certain length of time, and then turn to cash deposits for a few years before the child turns 18, to give greater certainty of outcome.

If you click on the Natwest link above and go to "How is the money invested" you will notice that they say

" We also gradually move the money in your child’s account to lower risk investments from when your child reaches their 13th birthday to help preserve the savings they have built up. This is phased between age 13 to 18 starting at 20% in the first year."

However, essentially, you need to choose the option that you understand and with which you are comfortable.

The JISA (unlike the CTF), does allow the child to have both a cash element and a stocks and shares element if that would suit you better.


For example, you might choose to transfer to the Halifax Cash JISA and use the Halifax stocks and shares JISA in tandem with it although the "service charge to be introduced" might not suit you.

All in all, if you are unhappy with stocks and shares and are happy to open an ISA of your own with Halifax, 4% is a good return on cash in their JISA and well ahead of inflation - perhaps transferring to that might suit you in the short term, while you learn more about investments.

If you chose to stay in cash you would need to keep an eye on rates and be prepared to transfer again if necessary.

More information about JISA

http://www.mummymoneymatters.com/savings-junior-isa/