Parents unaware of CTF transfers: Scottish Friendly

Parents unaware of CTF transfers: Scottish Friendly

Scottish Friendly has urged parents to check the status of their child trust fund, as its research found that over half were unaware of changing legislation that will allow them to move their money into a Junior Isa.

The government announced over a year ago that from 6 April this year, it will give parents the option to voluntarily transfer any funds into the new Junior Isas.

According to HMRC, there are approximately 6.3m Child Trust Fund accounts, with Scottish Friendly’s research amongst just over 2,000 people this month showing that the current average CTF holds approximately £1,409 - meaning that as much as £8.9bn could be moved.

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Calum Bennie, savings expert at Scottish Friendly, explained that the new rules are voluntary, but essentially give parents the opportunity to seek out accounts with better interest rates or better growth potential, whilst also allowing for more flexibility when building a savings pot for their children.

Despite many parents being unaware of the forthcoming changes, when made aware, 80 per cent of those surveyed by Scottish Friendly said that they would be likely to move their child’s money to a Junior Isa.

Mr Bennie stated: “There is a very real danger that if more isn’t done to let people know about the change in rules, parents may just end up leaving their money in a CTF where interest rates can be as little as 1.05 per cent.

“It took a considerable amount of persuading the government to make these changes, so it’s important these hard won gains aren’t forgotten about.”

Research last October on behalf of SavvyWoman showed that 37 per cent of parents did not know or were not sure whether all children or only certain children are allowed a Junior Isa.

Sarah Pennells, founder of SavvyWoman, said: “Our research shows that many parents are still baffled by or aren’t sure about the rules. Junior Isas aren’t the same as Child Trust Funds or adult Nisas, which may explain why parents haven’t got to grips with them.”