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Many of you will have some savings or investments stored away for your children or grandchildren and it is important to regularly review the accounts to make sure they are still the best option.

We come across many families who have child trust funds, which were originally available when children were born between 2002 and 2011.  The aim was to give an initial cash boost from the Government and then to encourage ongoing saving in a tax efficient environment, to provide a nest egg for the child upon reaching age 18.

Child Trust Funds were then scrapped in 2011, but any accounts that were already open continued to operate as they were intended.  Junior ISAs were introduced in 2011, almost as the replacement.  Whilst these accounts do not receive the initial cash boost, they do provide tax efficient growth.

There were several different types of Child Trust Fund that were available, and the key part is to review what you have and question whether it is still appropriate.  With the introduction of the Junior ISA, this brought a wider marketplace and therefore more choice both in terms of the number of companies offering Junior ISA accounts and more freedom as to how the money was invested or saved.

In 2015 a piece of legislation was passed which allowed Child Trust Funds to transfer to a Junior ISA.  One of the key attractions of this for investment-based accounts, was that it generally gave a much wider choice of investments available.  If the money in the account is invested, the key factors are performance and cost.  If you can get both of these elements working together (reducing costs and increasing performance) then the end result will be a better return and more money when the youngster reaches age 18.

It is estimated that there are over six million Child Trust Funds still active, and it may be that they are all held in the right place for the right reason, but we would urge you to check the features of the account that is in place and make sure you understand what your options are.

If you are unsure about your children’s Trust Fund and would like advice, we would be more than happy to help.  Whilst I am based from our Penrith office, we also have leading advisers in all of our offices, Carlisle, Dalston, Dumfries, Penrith and Workington.  Please don’t hesitate to get in touch today.