Child Trust Fund into Junior ISA
Discussion
Hi all, am hoping for some advice from the more financially literate amongst us.
My youngest son has a Child Trust Fund account with Yorkshire BS and, I'm ashamed to say, it was opened and forgotten about until they recently wrote to me to advise that the interest rates were going down to 1.7% pa.
I know that the CTF scheme has now been scrapped so I have been looking at alternatives. From some online reading it appears that a stocks and shares Junior ISA would be more likely to yield higher returns than cash savings (son is currently 7).
My issue is that I have very little knowledge around investment ISAs and therefore am finding it tough to make an educated choice. I have taken a look at Hargreaves Lansdown site and Fidelity as both seem to offer lower management fees but to be honest it's all a bit French to me.
Would anyone be able to offer some advice on what to look for and potential pitfalls?
Thanks in advance
My youngest son has a Child Trust Fund account with Yorkshire BS and, I'm ashamed to say, it was opened and forgotten about until they recently wrote to me to advise that the interest rates were going down to 1.7% pa.
I know that the CTF scheme has now been scrapped so I have been looking at alternatives. From some online reading it appears that a stocks and shares Junior ISA would be more likely to yield higher returns than cash savings (son is currently 7).
My issue is that I have very little knowledge around investment ISAs and therefore am finding it tough to make an educated choice. I have taken a look at Hargreaves Lansdown site and Fidelity as both seem to offer lower management fees but to be honest it's all a bit French to me.
Would anyone be able to offer some advice on what to look for and potential pitfalls?
Thanks in advance
Stocks and shares ISA are a good option and both HL and Fidelity are well regarded. They will each have a pool of recommended funds which can narrow down your choices.
Being able to hold the funds long term are a definate advantage but with the recent fall in the value of the pound funds with foreign shares aren't as attractive and the whole Brexit uncertainty may hit UK funds over the next few years, so consider this if you might want to withdraw the money sooner than later.
Tracker funds, or big funds of funds can have lower fees.
If you have a lot to invest an IFA may well be worthwhile if you don't for example want to go with one of the ready made portfolios on offer.
I would say though its not as daunting as it sounds and you'd be very unfortunate to get less back over the long term that you would in cash and quite likely to get a lot more.
Being able to hold the funds long term are a definate advantage but with the recent fall in the value of the pound funds with foreign shares aren't as attractive and the whole Brexit uncertainty may hit UK funds over the next few years, so consider this if you might want to withdraw the money sooner than later.
Tracker funds, or big funds of funds can have lower fees.
If you have a lot to invest an IFA may well be worthwhile if you don't for example want to go with one of the ready made portfolios on offer.
I would say though its not as daunting as it sounds and you'd be very unfortunate to get less back over the long term that you would in cash and quite likely to get a lot more.
In theory you can, in practice it seems to be a PITA. I have F&C CTFs for my kids and I want to transfer them to Junior ISAs. But although a transfer is fine in theory, in practice a lot of providers don't want that business.
Much of my savings is with Fidelity who offer JISAs, but they won't accept transfers from CTFs. Which is a shame as it would be easier to have it all on one platform.
Much of my savings is with Fidelity who offer JISAs, but they won't accept transfers from CTFs. Which is a shame as it would be easier to have it all on one platform.
Zigster said:
In theory you can, in practice it seems to be a PITA. I have F&C CTFs for my kids and I want to transfer them to Junior ISAs. But although a transfer is fine in theory, in practice a lot of providers don't want that business.
Much of my savings is with Fidelity who offer JISAs, but they won't accept transfers from CTFs. Which is a shame as it would be easier to have it all on one platform.
Our IT's are with Fidelity so that doesn't sound promising does it! Will drop my IFA an email & see what she says.Much of my savings is with Fidelity who offer JISAs, but they won't accept transfers from CTFs. Which is a shame as it would be easier to have it all on one platform.
LordHaveMurci said:
Sorry to hijack but can you transfer funds out of a CTF then?
Our 13yr old son has whatever was contributed originally, we have been paying into Investment Trusts for both him & his sister so could we transfer the few hundred quid from his CTF?
YES, EASY PEASY.Our 13yr old son has whatever was contributed originally, we have been paying into Investment Trusts for both him & his sister so could we transfer the few hundred quid from his CTF?
I transferred my son's HSBC Fund CTF to a self managed JISA with HL about two years ago.
I know markets have improved (and there is a great uncertainty about the future) but it's up about 20% since.
Easy to add more to, a recently ended 6 year Childrens bond with Yorkshire Bank - 4.5%pa IIRC was cashed and paid in.
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