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Government consults on CTF to Junior ISA transfer

The Government has launched a consultation into planned changes which will allow parents to swap their Child Trust Funds (CTF) for Junior ISA’s. The consultation will be open until 6th August 2013, and a decision will be made after this time.

The Government will consider responses from representative groups for children or savers, CTF holders, providers of CTF’s and Junior ISA’s, as well financial advisors.

The CTF was introduced in 2004, and was issued to most children born in the UK between the dates of 1 September 2002 and 2 January 2011, as a means of encouraging parents to save for their children’s future. Within the scheme the Government committed vouchers to boost the value of the account when it was opened, but cuts on spending meant the scheme was discontinued and the CTF died out.

The Government reiterated their commitment to savings in the recent budget, and despite poor figures for ISA’s so far this year, many will be pleased that they are taking plans to allow CTF to Junior ISA transfers seriously.

Sajid Javid, Economic Secretary to the Treasury said: “The Government wants to support parents to ensure that there are clear and simple ways to save for all children. This is why we introduced Junior ISA’s in 2011 and why, in the interests of fairness, we are today consulting on how to give the 6.3 million children who have a Child Trust Fund the chance to open one too”.

There is thought to be a total of £4.8bn held in CTF’s. In the event of a transfer it would be possible to change to a new provider, but the CTF would have to be closed completely.

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