Just a few days after its launch parents are voicing their frustration at the new Junior ISA scheme. As many as 5 million children may be ineligible for a Junior ISA because they already have a child trust fund, which does not offer the same benefits.
Parents argue that Child Trust Funds, which have now been discontinued, are inferior to the tax efficient Junior ISA and that the fact they have now been sidelined to make way for the new savings scheme means that they will not perform well in the future.
An online petition has been created to bring this unfairness to the attention of the Government and Public, stating that “Children born between 2002 and 2011 are being subjected to a form of discrimination which breaches their human rights: they will be the only group of British citizens barred from investing in an ISA.” The petition can be found at https://epetitions.direct.gov.uk/petitions/7468
Talking about Child Trust Funds, Danny Cox, of investments experts Hargreaves Lansdown stated: “These have not performed well in the past and are likely to get even worse now that new trust funds are no longer available. This sends a negative message about saving to the millions of parents and grandparent who have struggled to money aside for a child’s future.”
Hargreaves also stated that he supported the aims of the petition; “The fairest way to avoid a two-tiered system is to allow children to have either a CTFs or a Junior Isa and allow transfers between the two. In this way the market will decide which products survive and all children will have the opportunity to decide which product suits them best. We feel strongly about this and continue to take this up with the Treasury”..