Can we or can’t we

northeast_villafan

I opened up a junior isa for my daughter recently who has just turned 16 as her savings rates with her current provider plummeted. On advising my other half she mentioned that when my daughter was born she had a Ctf with another provider for a few years that she then changed to a Junior Isa years ago because the interest rate was poor. She assures me that no money has gone into that Isa for years and was only holding onto it as the government would place more money in it for free when she turns 18. Is this correct re Free money and have I done anything wrong by opening this new Isa which I have not yet transferred the funds from her savings account.
Thanks in advance for any advice

bowlhead99

With the CTF there was initial free money from the government when the child was born (this reduced in about 2010 and stopped in 2011) and there was also a further free top up at age 7 (which was also stopped in about 2010). There won't be any free money at age 18 - and even if CTFs did once have that perk (which I don't think they did), your daughter does not have a CTF any more, because she transferred it to a JISA.

The headlines about 18-y/os getting 'free money' at age 18 is simply that the oldest cohort of children who had CTFs are now old enough to be able to cash them out and get their hands on the money that had been put into them (by either government or their parents) over the years.

As your daughter already has a Junior ISA (arranged by the mother at some point in the past) she can't now also subscribe to another JISA of the same type. If she has a cash JISA she could open a S&S one (though age 16 is a bit late to consider using one, as they carry investment risk), or if she has an S&S one it would be fine for you to now open a cash one.

If she already has a cash one, you shouldn't have opened another cash one now with the intention of putting new money in it; if you haven't put any funds into the new one you can simply tell the provider to close it because it would be invalid if you funded it.

However, if the one you just opened has a better rate than the old one that she's had for years, it might be sensible to dig out the details of that old one and transfer it into the new account. Once all the money is in the new JISA, it's fine to fund it - but you can't have two separate cash JISA pots with different providers.