The value of investments and any income from them can fall and you may get back less than you invested.
Transferring a Child Trust Fund
A stocks and shares Junior ISA has the potential to deliver higher returns than a Child Trust Fund, but it does involve more risk and the value of your investments can fluctuate. Once you have opened your BPS stocks and shares Junior ISA you can download the transfer form.
Child Trust Funds
All children born between 1 September 2002 and 2 January 2011 were eligible to save in a Child Trust Fund (CTF) and could have received up to £1,000 free from the government. However, in 2011 Child Trust Funds were replaced by Junior ISAs. There are an estimated 1 million lost Child Trust Funds containing up to £600million.
How do I track down a missing CTF?
Children aged 16 or over who can manage their Child Trust Funds, or their parents, can fill in a government form requesting their accounts be tracked down via the website www.gov.uk/child-trust-funds
Why transfer to a stocks and shares Junior ISA?
Many providers no longer offer Child Trust Funds, and available interest rates can be uncompetitive.
Investment Child Trust Funds can have charges of up to 1.5%, compared to the much lower BPS service fee of 0.70% for a stocks and shares Junior ISA.
With a Junior ISA, when your child reaches 18 it will automatically convert to an adult ISA, so it continues to benefit from tax-efficient allowances. However, if you keep the funds in a Child Trust Fund, when your child reaches 18 they will receive a cheque and not be able benefit from continued tax-efficient allowances.
You can credit a Child Trust Fund with the full annual allowance (£4,368), transfer it into a Junior ISA and then add the full Junior ISA allowance (£4,368).