Child savers to lose £300m over 10 years

17 month old boy holding tissue to face
17 month old boy holding tissue to face
PHOTOLIBRARY

People saving money for children in Child Trust Funds (CTF) could have their potential payouts cut by more than £300 million over the next ten years because they cannot transfer into higher paying Junior Isas (individual savings accounts).

That’s the message from a new study by Which?, the consumer champion. It found that the average Junior Isa is paying a fifth more interest than the typical CTF. For example Nationwide’s CTF account pays just 1.1 per cent, but its Junior Isa account pays 3 per cent (including a 0.9 per cent one-year bonus).

The best CTF rate, of 3 per cent, from Yorkshire Building Society, includes a bonus of 0.7 per cent , whereas the very top Junior Isa rates of 3.02 per cent, come