Junior ISA. Can i do this...

[Phooey]

Child born Sept 2008. HSBC Stakeholder Child Trust fund (CTF) set up from early 2009 and contributing 100 month, Direct Debit. Still contributing, and plan to do so until child is 18 yrs old.

Is it possible to swap this fund into a Junior ISA, or cease this fund and open an ISA, or do i have to continue with the CTF?



Or i suppose the question is, would a Junior ISA be better than the CTF?

Thanks

[Helicopter123]

An interesting one, I have a similar problem.

Child 1 - born Dec 2007, CTF.
Child 2 - born Oct 2011, nothing in place.

Don't really want to end up with two products.

Spoke with a coupe of providers last week but no-one seems to know the answer.

I had thought about porting the existing CTF to a junior ISA. Suspect this will happen at some stage automatically ala PEP/ISA.

Maybe something on the budget?

[2 5HAN]

BIg article in the Mail about this last year

http://www.dailymail.co.uk/money/saving/article-20...

Went to see an IFA about his last week and the rules still stand which is frustrating to say the least when read the comparisons in the article

[Phooey]

Thanks Shan, i'll have a read of that article later.

Mark, i too have found little knowledge out there of the CTF/Junior ISA funds. I'm going to keep on with the CTF anyway. The rules will probably change half-dozen times in the next 15 years anyhoo

[cailean]

If you have a child with an existing CTF, the annual contribution limit has gone up to 3600 to match that of the JISA so there is no huge difference between the two.

[TFP]

cailean said:

If you have a child with an existing CTF, the annual contribution limit has gone up to 3600 to match that of the JISA so there is no huge difference between the two.

Correct.

The problem with existing CTF's is one of investment choice i.e. its very narrow.

The original architecture of CTF's caused the problem. The very low investment limits lead to a pretty limited number of providers entering the market, and those that did so offered very restrictive products to seek to ensure they could achieve some sort of commerciality. I think there was probably also a concern that the policy could be reversed/amended by subsequent Governments, rendering the product at risk of legislative change. Providers just didn't want to get burned (and the smart ones have been proved right).

JISAs have kicked off with much higher investment limits, allowing providers greater scope of achieving critical mass, and so those that have brought a product to market have been able to offer more features in their product. Importantly, platforms have bought in, offering an investment universe far wider than CTF's ever could.

As has been said, there is an apparent oversight in the new regs. CTF's are now very much the poor relation of JISA, despite the grandfathering of the investment limit, and not allowing transfers between seems unnecessarily restrictive.

It appears, to me, that this has been done to protect original CTF providers, many of whom did not reach critical mass, and the ability to transfer away to JISA might be the straw that breaks the camels back for some of them.

[Phooey]

TFP said:

Thank you TFP.

Looks like, for now at least anyway, we'll just have to carry on with the CTF, in the hope that the gov decide to automatically merge them into an ISA, and make it a level playing field.

[cailean]

My children's CTFs are with Selftrade and I can trade in just about any unit trust, share and ETC etc. I'm not sure what is limited about that?

[Phooey]

cailean said:

My children's CTFs are with Selftrade and I can trade in just about any unit trust, share and ETC etc. I'm not sure what is limited about that?

What's limited about that is the fact that I - who really doesn't have a clue on investing, has to do the gambling, whereas if it was an ISA, i could use/trust an/any IFA to do the investing for me.

[TFP]

You're very much in the minority.

If you check the data on all CTFs taken out, you will find that only a very small proportion were non-stakeholder.

[2 5HAN]

http://www.dailymail.co.uk/money/saving/article-21...

Just read this on the Daily Mail website, hopefully they will make a change for those stuck with the CTF's

[mattnunn]

My 3, born in the last 5 years, are all on differing schemes from different providers, 2 CTF with differing government input, 1 junior ISA, although I obviously put the same monthly figure into each.

The way I see it it'll give them all something to argue and have bitter rivalry about when the get to 18 and might teach them something about the speculative and uncertain nature of capitalist economics.

[Edinburger]

TFP said:

cailean said:

If you have a child with an existing CTF, the annual contribution limit has gone up to 3600 to match that of the JISA so there is no huge difference between the two.

Correct.

The problem with existing CTF's is one of investment choice i.e. its very narrow.

The original architecture of CTF's caused the problem. The very low investment limits lead to a pretty limited number of providers entering the market, and those that did so offered very restrictive products to seek to ensure they could achieve some sort of commerciality. I think there was probably also a concern that the policy could be reversed/amended by subsequent Governments, rendering the product at risk of legislative change. Providers just didn't want to get burned (and the smart ones have been proved right).

JISAs have kicked off with much higher investment limits, allowing providers greater scope of achieving critical mass, and so those that have brought a product to market have been able to offer more features in their product. Importantly, platforms have bought in, offering an investment universe far wider than CTF's ever could.

As has been said, there is an apparent oversight in the new regs. CTF's are now very much the poor relation of JISA, despite the grandfathering of the investment limit, and not allowing transfers between seems unnecessarily restrictive.

It appears, to me, that this has been done to protect original CTF providers, many of whom did not reach critical mass, and the ability to transfer away to JISA might be the straw that breaks the camels back for some of them.

I agree with this. The rules around JISAs mean the low maximumn contribution limit will significantly minimise the profitability factor around a JISA, but nevertheless a number of platforms offering JISAs mean you can speak with your IFA and set-up an appropriate model for the JISA holdings.

[Edinburger]

Phooey said:

Child born Sept 2008. HSBC Stakeholder Child Trust fund (CTF) set up from early 2009 and contributing 100 month, Direct Debit. Still contributing, and plan to do so until child is 18 yrs old.

Is it possible to swap this fund into a Junior ISA, or cease this fund and open an ISA, or do i have to continue with the CTF?



Or i suppose the question is, would a Junior ISA be better than the CTF?

Thanks

The answer to this question is no. It's one or t'other I'm afraid.