So we welcome that the government acknowledges that "in the interests of fairness, children with CTFs should not be prohibited from holding a Jisa if this account would be better suited to their long-term interests than a CTF".
However, worryingly, the government is concerned about the potential negative impact of the proposals on the CTF providers that stand to lose accounts if they don't also offer junior Isas, particularly the smaller financial institutions that could lose business.
It would be short-sighted of the government to further disadvantage the 6m children invested in CTFs, in favour of the interests of a handful of small companies that have taken advantage of a regime that gives them government money to invest and allows them to take high charges.
There is no excuse for the government to be lenient on a sector in which there is no longer healthy competition, while damaging the prospects for investment success of the generation of children born between 1 September 2002 and 2 January 2011.
While the government claims in the consultation that "the CTF market remains vibrant, with around 70 providers holding in excess of £4.8bn in more than 6m accounts", vibrant is an absurd description.
Last October, research by Bestinvest highlighted the poor choice and lack of competition in the CTF market. It found a dearth of mainstream providers - almost a quarter of those 70 providers are Welsh credit unions, many of which may have simply received cash from the government by registering to receive the £250 government vouchers that the recipients have failed to invest.
Bestinvest also found that 44 per cent of CTF providers had no information on their CTFs on their websites, hardly suggesting a vibrant market keen to attract business from competitors.
Three-quarters of CTF assets are invested in stakeholder accounts - and most of these are index tracker funds, charging the maximum 1.5 per cent a year allowed. This implies a market with little product choice and too high charges. A merger with the Jisa regime is long overdue.
