The Government is consulting on allowing savings to be transferred from Child Trust Funds to Junior Isas.
Closing on 6 August, the consultation will examine whether such transfers should be allowed to take place and sets out the Government’s proposal on how they should be carried out.
The move follows the announcement by chancellor George Osborne in this year’s Budget speech that the Government will consider the position of existing CTFs. Children born between 2002 and 2011 still contribute into their CTFs, although the funds were abolished in 2011 and replaced with Jisas.
According to the consultation document, the Government acknowledges that “in the interest of fairness”, children with CTFs should not be prohibited from holding a Jisa if this better suits their long-term interests.
It adds: “The Government wants to support parents by ensuring that there continues to be a clear, simple and attractive way to save for children. Now that the Junior Isa is an established saving brand for children, it believes that there is a case for considering the position of existing CTFs.”
Among the issues examined in the consultation are whether “registered contacts” for a CTF account would be able to choose between a CTF and Jisa or if a better approach would be to merge all CTFs into Jisas.
The Government prefers the first option.
The CTF currently runs more than £4.8bn spread across over 6m accounts offered by around 70 providers.