Page 26 - Budget Newsletter - March 2023

(which has the same investment limits). It is possible to transfer CTF accounts to a JISA, a move that
may result in reduced fees and a wider investment choice.

The first CTF accounts, for children born in September 2002, reached maturity in September 2020.
By default, matured CTF accounts have continued to enjoy the current UK ISA tax exemptions as a
‘protected account’. If instructions are given, they can be transferred to an adult ISA, with any such
transfer not counting as a contribution for the tax year, unless it is to a LISA. According to research
published by the National Audit Office in the days before the Budget, as at April 2021 there were
145,000 unclaimed CTFs with a total value of £394m (an average of over £2,700 per account). Many
CTFs are ‘lost’ with just one payment of £250 having been made by the Government over a decade
ago. To trace a CTF, go to https://www.gov.uk/child-trust-funds/find-a-child-trust-fund.

University funding

The £9,250 a year maximum tuition fee for new 2023/24 students in England and Wales is, for now,
a fact of student life, even if the educational process is much less certain. However, the new
academic year sees this year’s undergraduate intake in England being placed into a revised loan
repayment system which will mean loans start to be repaid at a lower earnings threshold than
today’s and will only be written off after 40 years, rather than the current 30 years.

If you have children likely to go to university, it makes sense to consider your funding options. For
example, JISAs are a potentially valuable tool to build up a fund by age 18. For those who prefer a
greater degree of control over the student's access to the investment at age 18 (while retaining tax
efficiency) collective investments held subject to an appropriate trust can look attractive, as could
an offshore investment bond.

Despite these tax-efficient "pre-funding" opportunities, under the current rules many experts
consider that it makes sense to take the student fee loans while at university rather than pay fees
from capital. That is because repayment for most recent English and Welsh loans only begins once
earnings reach £27,295 and any debt is currently written off after 30 years from the April after
graduation.

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