Children’s Savings

This page provides information and resources in relation to children’s savings accounts, namely Child Trust Funds (CTFs) and Junior ISAs (JISAs).

The first children with a Child Trust Fund (CTF) product reached 18 in September 2020 and were entitled to receive and take action on the maturity proceeds. The regulations, industry and publicity needed to be in place for the event.

Benefits to consumers


CLEAR COMMUNICATION FROM FIRMS ABOUT MATURITY OPTIONS

INCREASED PUBLICITY TO ENABLE ACCOUNT HOLDERS TO REUNITE WITH THEIR ACCOUNTS

A GENERATION OF YOUNG ADULTS BEING ABLE TO GET A START IN THEIR ADULT LIFE WITH THE MATURITY VALUE

Benefits to industry


THE PROJECT HAS ENABLED FIRMS TO CONTRIBUTE TOWARDS THE REGULATIONS AND PROCESSES AND RAISE AREAS OF CONCERN DURING THAT DEVELOPMENT PROCESS

Benefits to UK economy


WORKING WITH HMRC AND THE FCA, IN A COLLABORATIVE APPROACH, HAS LED TO A SMOOTH DEVELOPMENT, CONSULTATION AND PUBLICATION PROCESS WITH ISSUES RAISED AND RESOLVED ALONG THE WAY

HMRC WERE INVITED TO THE CALLS DURING THE PANDEMIC IN ORDER THAT THEY COULD FEEL COMFORTABLE THE INDUSTRY WOULD MEET THE DEADLINE

TISA Groups & Resources

CTF Maturities Working Group

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CTF ‘Gone Aways’ Working Group

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Child Trust Funds and Junior ISAs

Both products are savings vehicles for children. The Child Trust Fund (CTF) was opened for children born between the 1st September 2002 and 1st January 2011. The Junior ISA (JISA) was launched later that year to replace the CTF for children born from 1st January 2011 but didn’t benefit from any government contributions. A child can have only one or the other.

The investment limit as at 2019/20 tax year for both products is the same at £4368 and is reviewed annually. More details of each product type are provided below.

Both products offer investment into either a cash or investment type.

From 6 April 2015 it has been possible to transfer a CTF into a JISA.

Child Trust Fund

Launched in 2005, with all children born on or after 1 September 2002 benefiting from one. The account was opened with a £250 donation from the government, through a voucher provided to the parents. If the parents had not opened an account after a year then HMRC (HM Revenue & Customs) would open one on the child’s behalf through one of the numerous firms registered to accept them. These are known as Revenue Allocated Accounts (RAA). Lower income families also received an additional £250.

Initially, children were due to receive a further payment of £250 on reaching age 7. From August 2010 through to its closure the opening contribution was reduced to £50. Lower income families contribution was reduced to £100 (£50 plus £50 additional contribution) in total. Age 7 payments were stopped from August too. This means age 7 payments were only made for children reaching 7 between 1 September 2009 and 31 July 2010. Some 6m accounts were opened during this time with approximately 1.5m of these being RAA.

Although the amount you can invest into a CTF is the same as a JISA and is reviewed each tax year, the annual contribution limit runs from birthday to birthday not the standard 6 April to 5 April.

Additional contributions from Wales

Wales introduced a £50 payment for children living in Wales which had to be claimed by the parents. Low income families would receive an extra £50. This lasted for approx 2 years between Autumn 2009 and 31 January 2011.

Maturity

The first Child Trust Funds mature from September 2020 with the final ones due to mature in January 2029. Details of how the industry might handle this and the final regulations etc are still being drafted and should be available in Summer 2019. A working party has being established to work with HMRC in order to help make the introduction of the regulations as smooth as possible.

Junior ISA

The Junior ISA (JISA) was the replacement to the Child Trust Fund and was launched on 1 November 2011, available for any child under the age of 18 who does not have a CTF. Unlike the CTF it does not benefit from any government contribution but relies on family and friends to make investments.

It sits within the ISA family of products and is regulated as part of the ISA regulations.

Maturity

On reaching 18 the JISA automatically rolls over into an adult ISA and becomes subject to the usual ISA rules. The value does not contribute towards that year’s ISA allowance.

HMRC ISA Statistics (Including JISA)

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HMRC CTF Statistics

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HMRC ISA Managers’ Guidance (including JISA)

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HMRC CTF Managers’ Guidance

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Children’s Savings Publications

Children’s Savings News