Child Trust Fund vs Junior ISA

For parents across the UK, setting aside money for a child’s future feels like one of those “sensible but slightly overwhelming” responsibilities. With options like the Child Trust Fund and the Junior ISA floating around, it’s no surprise that many people are left wondering which one’s the smarter choice or whether they should be doing something different altogether.

So, if you’ve ever found yourself asking whether a CTF or Junior ISA is better, this guide is for you. We'll walk you through how each works, where they differ, and why one might be the better tool for growing your child’s financial future without overcomplicating things.

What is a Child Trust Fund?

Let’s start with the Child Trust Fund (CTF), a savings scheme introduced by the UK government back in 2002. The idea was simple: every eligible child would get a voucher from the government, typically £250 or £500 for low-income households, which could be placed into a long-term, tax-free savings account. Some kids even received a second payment at age 7.

These funds were available to children born between 1 September 2002 and 2 January 2011, and parents could choose between a cash account, where money earned interest, or a stocks and shares account, which invested the money for potentially greater long-term growth.

It was a great idea for its time: free money from the government and tax-free growth until the child turned 18. But in 2011, the government scrapped the scheme for new applicants, and no new CTFs can be opened today. Existing ones are still active, though, and can be transferred into Junior ISAs. This also allows account holders to transfer a cash ISA to a stocks and shares ISA, giving them the opportunity to seek potentially higher returns over the long term.

What is a Junior ISA?

The Junior ISA (JISA) took over from the Child Trust Fund in 2011, and it’s now the go-to option for saving on behalf of children. Available to any UK child under 18 (as long as they don’t already have a CTF that hasn’t been transferred), the Junior ISA is simple, flexible, and built for today’s market.

You can choose from two types:

• Cash Junior ISA – works like a savings account, but with tax-free interest

• Stocks and Shares Junior ISA – invests the money, with all gains tax-free

One of the best things about a Junior ISA is that anyone can pay into it: parents, grandparents, friends and up to an annual limit of £9,000 (for the 2024/25 tax year). The money belongs to the child and is locked in until they turn 18.

If you’re looking for the best Junior ISA, it’s worth comparing different providers — because unlike CTFs, Junior ISAs benefit from a much wider pool of options, better interest rates, and easier online management. If you’re deciding between a CTF and Junior ISA, the difference in choice alone can make a big impact.

How do they compare?

Alright, so both accounts help you save tax-free. But when you look under the bonnet, things start to shift. Let’s break it down with some context, not just a checklist.

Child Trust Funds had a great launch: free cash from the government, automatic enrolment, and some solid investment growth for those who opted in early. But today, most CTF providers are offering limited products, often with poor interest rates, outdated interfaces, and little incentive to keep things fresh.

On the flip side, Junior ISAs are very much alive and kicking. Banks, building societies, and online investment platforms are competing for your attention, which means better deals, more choice, and improved features. Whether you’re after a secure savings account or want to explore long-term investments, a Junior ISA gives you tools that CTFs just don’t anymore.

Why you should consider transferring your child trust fund

If your child already has a CTF, you don’t have to stay put. You can transfer CTF to Junior ISA, and many parents are doing just that—for good reason.

Here’s what you gain from switching:

• Higher interest rates – Cash Junior ISAs often beat the rates paid by legacy CTF accounts

• Better investment platforms – More choice and lower fees if you're using a stocks and shares option

• User-friendly experience – Most Junior ISAs come with online dashboards or apps, making it easy to keep track of the account

Most importantly, you don’t lose anything. The government’s initial voucher, any savings you’ve added, and all the interest or investment growth – it all transfers over intact. And the money stays locked in until your child turns 18, just like with a CTF.

All you need to do is find a Junior ISA provider you like and request a transfer. They’ll handle the admin and ensure a smooth transition.

Which one’s right for you?

So, after everything, if you're weighing up a CTF or Junior ISA, which one actually makes more sense?

If your child already has a CTF that’s been actively managed and is growing well, it might be worth keeping an eye on it, especially if it’s in a high-performing investment account. But if the account has sat untouched with minimal growth, switching to a Junior ISA could open the door to far better opportunities.

And if you’re starting from scratch, the answer is clear: Junior ISAs are the current standard. They give you more control, more flexibility, and often better value for the money you’re saving.

In short, the Junior ISA is the better all-rounder for today’s savers, especially if you want to maximise your child’s money without the limitations of outdated account types.

Your child’s money deserves a second look

It’s easy to assume that once a savings account is set up, the job’s done. But whether you’re working with a CTF or Junior ISA, the truth is, not all savings are created equal, especially when the market changes, new products emerge, and old ones get left behind.

Taking a fresh look at your child’s account could mean better returns, smarter investment options, and ultimately, more money in their hands when they turn 18.

So, take the time to check in. If it’s a CTF, see what it’s doing. Compare it to today’s Junior ISA offerings. If it’s underperforming, make the move. And if you’re just getting started? Go straight to the Junior ISA.

Because this isn’t just about saving. It’s about setting your child up for their best shot at financial freedom.

FAQs

Can I open a Junior ISA if my child already has a Child Trust Fund?

Not unless you transfer the CTF. A child can only have one or the other, but transferring is simple and doesn’t affect the tax benefits or maturity date.

Does transferring a CTF to a Junior ISA cost anything?

No. Transfers are completely free and handled by the new Junior ISA provider. There’s no charge, and your child won’t lose any of the money or interest gained.

Can my child manage their own Junior ISA or CTF before turning 18?

The parent or guardian manages the account until the child turns 16. From 16 onwards, the child can take control of management but can’t access the money until they’re 18.