Confusion over changes to Child Trust Fund vouchers means parents fear they’ve lost out on savings for their children. But if you miss the deadline, they’re automatically invested into a default account.
The CTF voucher scheme was scrapped under the Coalition Government and the last batch of vouchers has now been sent out. Those who qualified have been given 12 months to invest the vouchers, giving children of higher-rate taxpayers a kick-start to their savings, the Mirror reports.
However, if the deadline is missed vouchers aren’t lost as a trust fund account is automatically chosen at random from a selection of providers. This can mean the money is put into a high-risk account, which is at the mercy of the stock market. Although, this can lead to significant returns if the stocks go in your favour.
The launch of the Junior ISA scheme in 2011 has caused further confusion, as those who already have a CTF can’t have a Junior ISA. Suggestions that the two schemes should be merged could make things simpler and fairer.
If you need help understanding the current Junior ISA scheme check out MFM’s guide to JISAs.