This is a 1% increase from the 2016/17 limit of £4,080 in the tax-free savings account for children.

Junior ISAs replaced child trust funds in 2011, which have the same £4,128 savings limit for this tax year, although under 18s cannot use both savings vehicles. Since 2015, existing CTF holders can transfer the funds to a Junior ISA as long as the original account is closed.

Since they were first introduced by the Labour government in 2001 with a £250 government voucher for parents to use to invest for their children, around 6m children have a child trust fund, and around 4.7m of these accounts are stakeholder CTFs.

As per the Child Trust Fund (Amendment) Regulations 2017, from 6 April 2017, a lifestyling investment strategy is no longer a requirement for child trust fund accounts. Removing the lifestyling requirement means that providers will no longer incur one-off and ongoing costs. The guidance for providers has been updated to reflect this and other recent changes to legislation.

The CTF Bulletin 83 also stresses that all enquiries from the public and advisers regarding child trust funds need to be funnelled through the 70-odd fund providers and not directed at the tax office.

HMRC said: ‘We have received a significant number of direct contact from customers and will be redirecting them to contact us through their provider.’

General information about child trust funds is available on gov.uk

Junior Individual Savings Accounts (ISA) information