Transferring from CTF to Junior ISA

darren72 · 16 April 2018 at 11:41PM

Are there any disadvantages at all in moving from a Child Trust Fund to a Junior ISA ?

My niece and nephew both have CTF - One with Natwest and the other with Foresters. Neither look particularly attractive, but looking at the possibility of moving them both elsewhere.

Thanks in advance

Alexland · 17 April 2018 at 8:03AM

There are no particular disadvantages of switching to the Junior ISA wrapper however check the T&Cs of the old products in particular the Foresters account may be invested in an outdated 'with profits' fund for which there may be disadvantages to exiting early.

darren72 · 17 April 2018 at 11:28AM

Alexland wrote: »

There are no particular disadvantages of switching to the Junior ISA wrapper however check the T&Cs of the old products in particular the Foresters account may be invested in an outdated 'with profits' fund for which there may be disadvantages to exiting early.

Thank you for your reply. I didn't think there would be a disadvantage, as there is certainly more choice with JISA's.

The one with Foresters Financial was originally with The Children's Mutual, but was taken over by them in November 2016.

The Child Trust Fund is invested in Aberdeen Foundation Growth with an AMC of 1.5%.

The one with Natwest is in the 'RBS Stakeholder Investment Fund ICVC' also with an AMC of 1.5%

I can't see any mention of penalties for exiting early on either of them.

Alexland · 17 April 2018 at 11:33AM

I agree they both look a bit rubbish. Given the children are old enough to have CTFs then if they are likely to withdraw at 18 then, if continuing to invest, it's probably sensible to go with something reasonably balanced such as a VLS60 or VTR fund in a Vanguard Investor JISA - although they don't accept CTF transfers so you might need to convert it elsewhere first.

Maybe the Orbis Balanced fund - they are offering a £100 incentive to transfer each CTF into their JISA if you act quickly? Orbis are not cheap but their higher risk Equity fund (probably not appropriate for the age of the children now) has outperformed the MSCI World index by around 4% per annum since starting in 1990 but they have had a rough patch in the past couple of months. Also any transfers or contributions to the JISA in the first 12 months will be in fee-free units until the child is 18. You can manage both JISA accounts from the same adult login.

Alex

darren72 · 17 April 2018 at 11:36AM

Alexland wrote: »

I agree they both look a bit rubbish. Given the children are old enough to have CTFs then if they are likely to withdraw at 18 then, if continuing to invest, it's probably sensible to go with something reasonably balanced such as a VLS60 or VTR fund in a Vanguard Investor JISA.

Thank you. For now they won't be contributing much (if any) to them, so will purely be for the benefit of a better investment. Both are very low in value (around £500).

Do you know of any JISA's that would allow investments such as what you suggest with a low/no fee ?

Thanks again

Alexland · 17 April 2018 at 11:38AM

Sorry just remembered Vanguard don't accept CTF transfers so updated my post above.

darren72 · 17 April 2018 at 11:50AM

Thank you so much. Will take a look at Orbis.

Transferring from CTF to Junior ISA

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