Child Trust Fund vs Junior ISA – What’s Better in 2025?
If your child was born between 1 September 2002 and 2 January 2011, they likely have a Child Trust Fund (CTF). But with the introduction of Junior ISAs in 2011, many parents are wondering whether to switch. Here’s how they compare in 2025 — and what you should do.
What Is a Child Trust Fund?
A CTF is a long-term, tax-free savings account for children born in the eligible window. The government gave parents a voucher (£250 or more) to kick-start the fund. The money is locked in until the child turns 18.
What Is a Junior ISA?
A Junior ISA (JISA) is a tax-free savings or investment account for children under 18. Parents, grandparents, and others can contribute up to £9,000 per tax year (2025/26). Like a CTF, funds are locked in until age 18.
Key Differences
| Feature | Child Trust Fund | Junior ISA |
|---|---|---|
| Eligibility | Born between 1 Sep 2002 – 2 Jan 2011 | All UK children under 18 (since 2011) |
| Annual allowance (2025/26) | £9,000 | £9,000 |
| Account options | Cash or Stocks & Shares | Cash or Stocks & Shares |
| Interest/investment returns | Often lower | Typically higher rates/returns available |
| Account choice | Limited (many no longer promoted) | Wide choice of providers |
| Transfer allowed? | Yes, into a Junior ISA | No transfers into a CTF |
Why Switch to a Junior ISA?
CTFs have become outdated and many offer poor interest rates or limited investment options. By transferring to a Junior ISA, you can:
- Get better interest or investment growth
- Choose from a wider range of providers
- Manage the account more easily online
How to Transfer a Child Trust Fund to a Junior ISA
To switch:
- Pick a Junior ISA provider that accepts transfers
- Apply for a Junior ISA and request a transfer from your existing CTF
- The provider will handle the process — do not withdraw funds manually
There’s no penalty for transferring, and the full value of the CTF is preserved.
Can the Child Decide?
Once your child turns 16, they can take control of managing the CTF or Junior ISA, but they still can’t withdraw the funds until they’re 18.
Bottom Line: Which Is Better?
For most families, a Junior ISA offers better rates, flexibility, and provider choice. If you still have a Child Trust Fund, it's worth reviewing your options and considering a transfer, especially if the current account isn’t performing well.