CASH savings locked up in Child Trust Funds (CTF) could be allowed to transfer to Junior Isas under plans outlined by the Treasury yesterday.
About £4.9bn is stored in CTFs but kids who have trusts are currently barred from having a junior Isa, which were launched by the coalition government in November 2011.
The Treasury yesterday said it would consult on plans to allow parents who save for their kids in a CTF to transfer to junior Isa.
CTFs have come under criticism since the launch of junior isas for paying lower rates and locking six million children into an inferior product. Industry watchers welcomed the decision yesterday.
“Common sense has broken out at last,” Hargreaves Lansdown head of financial planning Danny Cox said. “This consultation will pave the way for a significant improvement in choice...and ultimately lead to a full merger.”
CFTs were introduced by the Labour government in 2005 and were eligible for children born between 1 September 2002 and 2 January 2011.
“This is great news for parents with savings languishing in uncompetitive child trust funds,” JP Morgan Asset Management’s Keith Evins said.
The consultation will last 12 weeks.