The end for Child Trust Funds, first announced last May, has finally come. So what are the alternatives if you want to save for your child?
Child Trust Funds, the last Labour government’s tax-free savings vehicle for children, were finally phased out as 2011 began – and as of 1 January, no new babies will be eligible to open Child Trust Fund accounts.
Government contributions to Child Trust Funds – once at least £250 per child – have now been scrapped altogether, after they were cut to £50 per child in August 2010.
Parents who have children with existing Child Trust Funds will still be able to contribute to them, and move their child’s money from one CTF to another should they wish to. You can find out which Child Trust Funds are currently offering the best deal by visiting the Which? Child Trust Funds review on our website.
Alternative ways to save for your child
Back in August, Which? Money’s experts compiled a list of seven smart ways to save for children. These are well worth looking at now, and include ideas such as opening a children’s savings account, starting to invest for your child or even starting a pension on their behalf.
In addition, if you’re expecting a child this year, you may want to find out more about Junior Isas. These new tax-free savings accounts for children are expected to launch in the autumn, with children born from January 2011 eligible to open them.
It is expected that, like Child Trust Funds, Junior Isas will be 18-year accounts with no access to the holder’s funds permitted until he or she reaches adulthood. The annual limit for parental contributions to Junior Isas has not yet been confirmed, but the government has said that there will be no contributions to Junior Isas from the state.
For more advice on the best ways to put money aside for your family’s future, visit the Savings and investments section of the Which? website.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.