News Paper

Looking for the Best Life Insurance deal?

We constantly analyse the UK market for leading life insurance providers to help you find amazing deals, so relax while we do the work for you. Simple, quick & no obligation. Quotes from £5 per month

Life Insurance News

All news

Long-awaited change to Child Trust Funds is announced

December 30, 2013

Over 6 million children with Child Trust Funds (CTFs) will be able to switch to Junior Individual Savings Accounts (ISAs), the government announced last week1.

The change, which will come into effect in April 2015, has been welcomed as ‘great news’ for children by financial experts who state that those with ISAs could benefit from significantly better interest rates on their savings.

CTFs were launched by Labour in 2002 and scrapped by the coalition government in 2011. During this time, the government gave 6.1 million children born between September 2002 and January 2011 £250 worth of vouchers to kick-start their savings, and some were given a further £250 at the age of seven.

However, the interest rates on CTFs are uncompetitive when compared to those offered on Junior ISAs, with the best interest rates at around 3% and 6% respectively.

Furthermore, parents with CTFs have not been allowed to open Junior ISAs for their children or transfer money across.

‘Child Trust Funds have been in terminal decline since 2011, seeing millions trapped in expensive products’, said Danny Cox of investment firm Hargreaves Lansdowne.

Since 2011, many parents set up Junior ISAs for their children as they could save up to £3,720 tax-free. This amount could be made from any proportion of both cash and shares and automatically adjusts to an adult ISA account once the holder reaches the age of 18.

So whilst parents of those children with CTFs can continue to build their children’s savings with these accounts, they may wish to switch to Junior ISAs in April 2015.

Parents may also choose to take out a life insurance policy to protect their children financially when they are no longer around.

If you were to pass away unexpectedly, a life insurance payout could not only keep a roof over your loved ones’ heads and pay the bills, but it could also provide a substantial amount of money to be put away for your children’s futures.

 


1www.bbc.co.uk ‘Change on Child Trust Funds ‘great news’ for children’, 23rd December 2013 < http://www.bbc.co.uk/news/business-25491629>

Facebook Twitter DZone It! Digg It! StumbleUpon Technorati Del.icio.us NewsVine Reddit Blinklist Add diigo bookmark

Get Quote Now!

1.Cover Required for:
info
  • Ageas
  • Legal & General
  • Aviva