CTFs - It's just not fair!

Posted on 13 July 2012 by Douglas Chadwick

I'm lucky enough to have 3 wonderful boys currently aged 10, 9 and 7. Although they are very different, with varying needs and interests, we always try to make sure they are treated equally. When Child Trust Funds were launched in 2005 we were put in a dilemma - the 2 younger boys were eligible, but the older one missed out. We set up an alternative investment for James and moved on. I was delighted when I heard that the government intended to launch Junior ISAs and hoped to be able to put all three back on a level playing field. Some of the leading fund supermarkets showed an interest, offering a wide range of funds through their cheap trading platforms. The Saltydog data could be used to maximise returns, and I was looking forward to explaining the fund changes, and getting the boys interested in actively managing their own money -  a lesson for life.

Initially there was talk of being able to transfer the Child Trust Funds into the Junior ISAs, but when the time came this was not allowed. This makes no moral sense, and I fear the only reason it didn't happen was because it was not in the interest of the financial institutions running the existing schemes. It certainly doesn't benefit the children.

So now the tide has turned and the two younger boys are stuck with Child Trust Funds. These are only offered by a few companies and the number will go down as time goes on. This means there is less competition and the result of this is already clear - the options are fewer and the charges are higher. Furthermore, when the CTFs reach maturity the money saved can't be kept within a tax free wrapper - unlike the Junior ISAs which just roll into a standard ISA. As my boys would say - 'It's just not fair'.

There is already a growing petition urging the government to right this wrong. Please join me and add your support to this campaign -  go to epetitions.direct.gov.uk/petitions/7468 for more details.