In its consultation documents, launched today (14 May), the government said it was “committed” to supporting savings and ensuring that families have access to suitable, tax-advantaged savings products that would allow them to save for their children’s futures in “a clear and simple way”.
Following the Chancellor’s announcement in his 2013 Budget that the government would consider the position of existing CTFs, the new consultation will look at whether transfers should be allowed and, if so, on what basis.
In the document, it proposes that voluntary transfers from a CTF to a Junior Isa should be allowed if requested by the registered contact for the account - usually the parent or guardian.
It also puts forward a proposal that, if the government legislates to allow voluntary transfers from CTFs to Junior Isas, it should also provide scope for further intervention at a later date, for example, to address any risks to the long-term viability of the CTF.
One option for further intervention being kept under review is the merging of CTF into Junior Isa.
Sajid Javid, economic secretary to the Treasury, said: “The government wants to support parents by ensuring that there are clear and simple ways to save for all children.
“That is why we introduced Junior Isas in 2011 and why, in the interests of fairness, we are today consulting on how to give the 6.3m children who have a Child Trust Fund the option to open one too.”
Background
The government launched Junior Isas on November 1 2011
It announced on May 24 2010 that it intended to reduce and then stop all contributions to CTFs
Email responses to the consultation to: public.enquiries@hm-treasury.gov.uk
