Child trust fund

Frogletina

My granddaughter has a child trust fund - RBS Stakeholder Investment fund ICVC.

The investment into it has been the original £250, in 2005, plus a further £250 the following year.

It currently is worth about £900.

She is 16 in September.

There is an inheritance due to her of £3000. I'm thinking that due to the investment only running for just another 2 years, it might be a good idea for the CTF to be transferred to a junior cash ISA and then getting the £3000 added to that. 

Any thoughts? 

I would appreciate advice on what to do for the best.

MX5huggy

When is she likely to want to spend the £3900? If it’s in 2 years then leave the CTF alone and just put the cash in the best savings account you can find. Is she ok that the 900 might be worth 500 in 2 years? 

Frogletina

The best savings accounts for a child are ISAs, and the best junior ISA is 2.25%.

However, a child cannot have a CTF as well as an ISA. 

As she is getting an inheritance it will need to be held in trust until she is 18 which rules out an ordinary savings account, which pays too little anyway.

MX5huggy

The current CTF is invested, not a savings product. Option a is just to put the £3k in there but 2 years is too short a investment horizon and the fees are probably not competitive. If you want to put the £3k in an Child ISA, then you’re (well the adult in charge of the CTF). Is going to have to move it to one of the few organisations that will take a CTF to ISA transfer I’m doing one into Hargreaves Lansdown at the moment. But I’ve got 7 years to run and the total value is more so worth the effort.

I would not be too concerned about trustees on just £3k for 2 years, get the will amended (or whatever the official term is for changing a will after death is) if you really want. 

Again in 2 years is the £3900 likely to be spent or saved again say for a house in 8 years? 

Frogletina

It's not a case of needing trustees, but all inheritances for a child need to be held in trust until the age of 18. A junior ISA is perfect as it cannot be accessed until 18.

I am hoping the child will want to continue saving but ultimately the decision belongs to them.

xylophone

Have you discussed the matter with the young person in question?

The registered contact could transfer the CTF to Coventry BS JISA and then add the inheritance to the JISA?

https://www.coventrybuildingsociety.co.uk/consumer/help/savings/isas/junior-isa.html#:~:text=If your child has a,ll explain how it works.

Frogletina

I've talked to her mother, and that's what I think might be the best option.