Clients with a child trust fund should transfer the account savings to a junior Isa, Sara Wilson, head of proposition for Alliance Trust Savings has said.
Ms Wilson said: “There are three key reasons to move to a junior Isa from a CTF: CTFs do not tend to be administered online, they are predominantly cash with historically low interest rates, and they offer a limited investment choice.”
In December 2013 chancellor George Osborne announced that savings from CTFs could be transferred to junior Isas from April 2015 at the request of the registered CTF contact.
Children holding a CTF are not eligible to open a junior Isa.
Ms Wilson, who said Alliance Trust Savings had waived its quarterly junior Isa charge for 2015, added that parents could still set up a junior Isa account before the changes kicked in.
Adviser view
Ian Lowes, managing director of Newcastle-based Lowes Financial Management, said: “CTFs are less flexible than the Isa so I would expect a shift. But I still think people should use trusts rather than banging the money into a junior Isa that can be accessed at 18.”
