The Fixer: Child Trust Funds

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Dear Fixer,
My husband and I want to save money for our children's future and opened accounts for both our six-year-old son and our two-year-old daughter when they were born.

My son's account is a Child Trust Fund, and my daughter's account is a Junior ISA.

I understood that these were the best options available when we opened the accounts, but now it seems that the interest rates I can get for my daughter are much higher than those I can find for my son.

We pay the same amount into each account every month and we really want the children to each end up with a similar amount at the end of the day.

However, I am unsure how to achieve this given the situation. Any advice you can give us would be very helpful.

K Matthews, Luton

Dear Mrs Matthews,

Child Trust Funds (CTFs) were scrapped in 2011 to make way for the launch of Junior ISAs.

Since then, fewer providers offer them and the interest rates and investment returns available have become less competitive, meaning that children born between September 1, 2002 and January 3, 2011 - such as your son - are at a disadvantage compared to those who were born later (or earlier) and can have Junior ISAs opened in their names.

The good news, however, is that while you cannot currently transfer money held in a CTF to a Junior ISA, Chancellor George Osborne has said that transfers will become possible from April 2015.

Savings experts therefore recommend continuing to save as normal and transferring the funds to a Junior ISA as soon as possible.

The Fixer

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