The government is to lift the ban on transfers from child trust funds (CTFs) to Junior ISA, according to the Daily Mail.
Chancellor George Osborne (pictured) said the move ‘supports hard-working families who want to save for their children’.
‘I’m delighted that, as a result of these changes, over six million children who currently have savings in a child trust fund will be able to benefit from better returns and lower charges on those savings,’ he added.
The move follows pressure from campaigners to unlock the funds, after the coalition government scrapped the £250 payment to newborns into the funds. CTFs were replaced with Junior ISAs, which do not attract a state contribution, leaving providers with little incentive to provide the best returns on the obsolete accounts. Some providers have also introduced higher charges on CTFs.
Danny Cox, head of financial planning at Hargreaves Lansdown, said: 'This is great news. This change will pave the way for a significant improvement in choice and outcomes for over 6 million children and ultimately lead to a full merger.
'Transfers should happen from April 2015 and in the meantime, parents and grandparents who are saving into child trust funds for their children or grandchildren should continue to do so.'