Since 6 April 2015, it has been possible to transfer funds from a Child Trust Fund (CTF) to a Junior Individual Savings Account (JISA). This has been a long awaited amendment to legislation which had previously left many parents in limbo regarding their children’s investments..
If you haven’t considered a transfer, speak to a financial adviser about the benefits.
The history of the CTF and JISA
CTF’s were a government initiative in place for babies born between 1 September 2002 and 2 January 2011. In May 2010 the coalition Government scrapped new CTF’s with effect from 2 January 2011 and with no immediate replacement.
In November 2011, the JISA was introduced, however, with a few differences. The main difference compared to the CTF was that there were to be no contributions from the Government. Instead though contribution limits were more generous and investment opportunities were wider.
When the CTF was abolished, those already investing in CTF’s plus, any babies born within the same timeframe (1 September 2002 to January 2011) were unable to invest in a JISA.
This left parents in limbo as product advancements were all geared around the JISA.
CTF versus JISA
The CTF has advanced in terms of it’s contribution limits and both now stand at £4,080 (15/16). However, as the CTF is still largely based on old ideals, investment options can still be limited.
Now there is the option to transfer funds from a CTF to a JISA it is worth speaking to a financial adviser who can help to work out scenarios for both products.