Child trust plans may be too late

A PROPOSAL to lift a ban on transferring money from child trust funds (CTFs) to junior Isas (Jisas) could be too late for millions of parents who have already stopped saving into the accounts.

More than half of people who had opened a CTF either no longer pay into it or have cut down on the amount contributed since the accounts were closed to new money two years ago.

They were replaced by Jisas, which are currently barred to CTF holders. That may change after the government announced in the Budget that it would consult on lifting the restriction, which has left millions of savers trapped in uncompetitive CTFs.

More than £4.3 billion has been saved into CTFs on behalf of 6.3 million children. But 38 per cent of CTF investors no longer put money into the accounts, while 17 per cent have reduced their contributions, many citing the poor interest rates.