Oliver wants some more - twist rather than stick with a gruelling CTF

Thousands of Olivers and Olivias are losing out to Harrys and Amelias and someone should be asking for ‘more’ from their Child Trust Fund on their behalf, says Furness Building Society – Mortgage Finance Gazette’s Best Regional Building Society 2013.

Oliver and Olivia were the two most popular baby names of 2010 – the last year in which children had a Child Trust Fund opened in their name through the issuing of a Government ‘voucher’ to a value of up to £250 in most cases. By 2011, Harry and Amelia were topping the names’ table and these children found that any money put away for them by relatives could be neatly stashed into Junior ISAs.

While Oliver and Olivia typically now have money sitting in accounts paying poor amounts of interest, Harry and Amelia are typically much better off, with Junior ISAs paying decent rates of interest … unless Oliver and Olivia have their Child Trust Fund with the Furness.

While the Furness always treated its junior savers fairly and continued to pay a good interest rate on CTFs, even though it was known that no new CTFs would be opened after the end of 2010, other lenders literally lost interest in them, slashing the rate that the sums invested earned.

This attitude reflected the fact that many Banks and Building Societies regarded CTFs as dead or zombie accounts, only ever holding the initial sum given to each child by the Government. Even the average amount sitting in them is only £750. No new money could be invested in them after 2010, so the view was ‘why pay a decent rate of interest?’

The Furness never adopted that view. It has continued to support those children who have money in its Child Trust Funds to the full. It pays the highest interest rate on a Child Trust Fund available in the market – 3.05% - exactly the same as is paid on a Junior ISA.

With the Furness, there are no instances of siblings earning more or less than each other on their savings, just because the law only allows them to save in either a CTF or a Junior ISA. In families where the CTF is not held with Furness, that is often a very real scenario.

The Government has announced the start of a 12-week consultation on the issues relating to Child Trust Funds. There is pressure to allow funds held in CTFs to be switched into Junior ISAs – which cannot legally happen at present. While the consultation is good news, nothing is likely to happen to alter the current situation until at least April 2014.

This means that many children will continue to lose out on their savings for at least a year, unless their ‘registered contact’ takes action and demands ‘more’ on behalf of all those Olivers and Olivias born between September 1, 2001 and January 2, 2011. To do that, they simply have to start the process to switch the sums held in their current CTF to a Furness Building Society CTF. They can then start earning an attractive 3.05%, rather than next to nothing.

Furness Building Society’s Sales and Marketing Director, Martin Cutbill, says: “Once a parent or other registered contact asks us to take over the sums held in their child’s current Child Trust Fund, our team then handles the process from there, contacting the existing provider to arrange for the transfer of the money held in the account. It really is easy to switch and the best option for the next year for any parent, grandparent or guardian who is frustrated at seeing their child’s money earning very little interest”.

Some Child Trust Fund providers are now charging an account fee on the CTF, which is typically £30. Parents should check whether or not a charge applies to their child’s account. Again, Furness charges no such fee.

The six million children with a Child Trust Fund account cannot take their money out until they reach the age of 18, so looking for the best rate and switching to it, really is the best advice at least for the next year.

For more information, visit furnessbs.co.uk.