Child Trust Fund maturity and investment into senior cash ISA

sukha_fulmama

My kid’s Child Trust Fund is due to mature when they reach 18 years this August. I have saved for them through out and have an excess of £20000. On maturity, I want to save this ( they will operate) to a Cash ISA with high interest.

I got in touch with Kent Reliance which offers a great interest rate for their variable rate ISA and they said they cannot accept the CTF funds unless this is already in an ISA !!! I only want to invest in Cash ISAs and current CTF holder does not offer pure cash ISA

 My understanding is that it should be allowed as tax free and they should have an additional £20000 allowance for this financial year. My worry is if they cannot initiate the fund transfer request, and an incorrect procedure is applied the whole fund may lose its tax free status. 

Can you please help with the correct procedure? Can ISA providers deny investment into Senior ISA from CTF funds on maturity?

Thanks 

S

 

 

Many Thanks for your advice

artyboy

Unfortunately if you didn't previously convert the CTF into a JISA, then you've ended up with a legacy product that not all ISA providers want to (or are set up to) handle - there will be some that will accept it so just ask around - as long as it's transferred to an instant access product, you'll then be able to do a further transfer to the higher interest one you actually want.

xylophone

https://www.gov.uk/child-trust-funds/what-happens-when-your-child-is-18#:~:text=On your child's 18th birthday,more money can be added

https://www.nationwide.co.uk/savings/help/transfer-isa/#transfer-a-matured-child-trust-fund-to-nationwide

Alexland

Does the existing CTF provider provide a route to transfer the account into a JISA or mature the account into an adult ISA? If not maybe transfer the CTF now to a provider that offers JISAs that mature to ISAs.

Or find an adult ISA provider that is willing to do a future dated transfer from CTF to ISA on the maturity date.

The gaining ISA Managers are free to decide if they are willing to do this so you may need to shop around.

Your child may decide once they have it in a Cash ISA wrapper to transfer it elsewhere for a better rate.

Or just let it mature as a non-ISA and then they could contribute the first £20k into a new Cash ISA at age 18 and any excess in the new tax year starting 6th April 2025.