Call for a children's ISA following axe of CTF Go compare with our comparison table

Call for a children's ISA following axe of CTF

25 May 2010 / by Rachel Mason

There have been calls for alternative tax efficient investment vehicles for children following news that the Child Trust Fund is to be axed.

George Ladds, who is head of investments and pensions research at Fair Investment Company, says 'good riddance' to the CTF, which he calls an 'odd concept' and calls for Children's ISAs to be introduced.

Mr Ladds, who says the idea that parents would not save for their children without a CTF is 'insulting', claims the whole system is unfair, given that one of his children will have £500 from the government when she turns 18 while the other will have nothing. He says he will not be sad to see the end of the CTF but warns something needs to be done about children's investment.

"Although I am not in support of the government giving children money with which to save, I hope that in the scrapping of the Child Trust Fund, the £520million saving is well spent and that children's saving is not completely forgotten," says Mr Ladds.

"There should be some review of savings vehicles available for children, because the current offering is antiquated and doesn’t reflect the modern world."

Mr Ladds goes on to say that he would like to see some sort of children's ISA introduced, which he says, would better encourage saving.

"Children and their parents would be encouraged to save if they could get the same tax efficient saving benefits that we are all entitled to. If the government set an ISA allowance of £3,600 for children this might encourage more to save in a way that they want to invest and enable parents to take more control over who they save for and when they receive the money."

Although most other commentary on the subject of the axing of the CTF is critical of the decision, David Kuo, director of says it was inevitable.

"It comes as no surprise that CTFs will be axed in the first round of cuts announced by the new coalition Government," he said.

"Whilst investing for the long term makes perfect sense, it is inconceivable that any responsible government can justify spending around £300m a year on children's investments for tomorrow when the nation is nursing a huge budget deficit today.

"To continue with Child Trust Funds is tantamount to buying shares with a credit card. It is illogical, irrational and irresponsible. Parents who are looking to help their children plan a secure financial future can still do so through children's savings accounts or, better still, through stakeholder pensions."

ProviderServiceISA OptionMinimum InvestmentMore Info
Family Investments Child Trust Fundno
£10.00 Per Month
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