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Where can I find more information on my Child Trust Fund (CTF)?

For every child born on or after 1 September 2002 until 2nd January 2011, where the parent was eligible for Child Benefit, the Government issued a voucher worth at least £50 which could only be used to open a Child Trust Fund (CTF).

The money was invested in a tax-efficient fund, and cannot be withdrawn by your child until they reach the age of 18.

You can find the full Key Investor Information Document (KIID) and Supplementary Information Document (SID) on our website (opens in a new window).

Can I gift more money to my child’s Child Trust Fund (CTF)?

Although CTFs are closed to new business, you can add an existing account. There are a number of different ways to make additional contributions into a CTF by you, friends or relatives. These include setting up a direct debit or standing order, paying in by cheque or over the phone. Whichever option you choose, you should be aware:

  • That once the money is gifted it becomes the property of your child and cannot be withdrawn until your child reaches 18
  • You can gift lump sums by cheque or standing order of amounts of £10 or more
  • you can gift a regular monthly amount from £10 a month
  • The maximum amount that can be saved each year is £4,260. A year starts on your child’s birthday and runs to the day before their next birthday.

Is the money at risk?

Your child’s savings are invested mainly in the stock-market so your savings have more potential to grow. However, please bear in mind the value of the fund may fall as well as rise and returns are not guaranteed and the capital is at risk.

How is the money invested?

The money is invested in a Fund, which offers lower risks than investing directly in shares – because the fund spreads your child’s investment across equities, bonds and cash. There is still a risk that your fund value could go down as well as up.

Can I open a Junior ISA as well as a Child Trust Fund (CTF) for my child?

A child cannot have both a CTF and a Junior ISA, but CTFs can now be transferred to Junior ISAs. To speak to our Junior ISA team, please call us on 0345 603 4047. If you have any questions including how to add funds or the charges applicable please contact us. For more information please read the full Key Investor Information Document (KIID) and Supplementary Information Document (SID) on our website (opens in a new window).

How does a Child Trust Fund (CTF) work?

A Child Trust Fund (“CTF”) is a savings (Cash) or investment (Stocks and Shares) account that launched in January 2005 and was available for children born between 1st September 2002 and 2nd January 2011. The CTF preceded Junior ISA (“JISA”) and was initially a government incentivised scheme, whereby free cash vouchers for £250 (up to £500 for low income families) were issued to each child. The person with parental responsibility could then open an account with the voucher, on behalf of the child.

Any income and gains on the account are exempt from UK income tax and UK capital gains tax. The CTF holder, (the child), the registered contact (person with parental responsibility) or other third parties (i.e. grandparents/friends), can collectively make contributions up to the subscription limit allowance (‘allowance’) for each year, which for 2018 is up to £4,260.

The allowance year runs from your child's birthday in one year to their next birthday.

How do I open a Child Trust Fund (CTF)?

You can’t open a CTF account because the scheme is now closed to new applicants. You can however apply for a JISA instead.

Can I withdraw from my child’s Child Trust Fund (CTF) account?

No. Only your child can withdraw their money in the CTF when they reach the age of 18, and this has to be in totality. There are no partial withdrawals permitted.

Should your child become terminally ill before age 18, the registered contact will need to apply to HMRC for authority to withdraw the money. Where your child has passed away the CTF is payable to your child’s personal representatives subject to appropriate evidence of death.

Who can I contact regarding my Child Trust Fund (CTF)?

If your child has a CTF but you don’t know with which provider, you can find out by following the below link and filling in the form online to ask HM Revenue and Customs (HMRC). You’ll need to sign in to your Government Gateway (opens in a new window) account or register for one.

Can I transfer to another Child Trust Fund (CTF) provider?

Although you can no longer open a new CTF, you can transfer your child’s existing CTF to another CTF provider.

Can a Child Trust Fund (CTF) be transferred to a Junior ISA (JISA)?

A CTF can be transferred to a JISA. This could be to the same provider (check your provider facilitates this) or to a new JISA provider.

How do I change Child Trust Fund (CTF) providers?

You can transfer a CTF with another provider, to either our CTF or JISA, by completing the relevant Transfer Form which is available on our website (opens in a new window).

You can also transfer your child’s CTF with us to another CTF or JISA provider. . You need to contact the provider you want to transfer to and complete their forms, in order to arrange a transfer.

The funds held in a JISA can be automatically rolled into an ‘adult ISA’ on maturity (when the account holder reaches the age of 18), outside the normal ISA subscription limits.

While this is not currently the case for a CTF, the government is considering the different options, which will be confirmed before the first accounts’ mature on 1 September 2020.

Can I switch to an ISA?

A CTF can be transferred to another CTF provider, a Cash JISA or a Stocks and Shares JISA prior to your child’s 18th birthday. Your child and/or the registered contact will be contacted prior to your child’s 18th birthday outlining the options for your child at age 18, of which one could be the ability to move the investment into an adult ISA.

Why transfer a Child Trust Fund (CTF) to a Junior ISA (JISA)?

Income and gains earned within both a CTF and JISA are exempt from UK income tax and UK capital gains tax, so the reasons to transfer may be decided more on other factors such as type of products a provider offers, your risk appetite and the fees charged.

If unsure, you should seek professional advice.

Which Child Trust Fund (CTF) should I invest in?

When deciding what to do, you have two options:

  • Savings (Cash ISA) - Low risk option that works like a normal savings account. It’s likely your child will get back the money that you put in, plus interest on top. NatWest / RBS do not currently offer a CTF Cash ISA. If you want a low risk option, you will need to initiate a transfer with another provider.
  • Investing (Stocks and Shares ISA) - Investing generally means the potential for higher gains but there’s also the chance of a higher risk of losses. You may not get back the money you invested. When investing in stocks & shares it is usually recommended to invest for a minimum of 5 years.

What is the difference between Cash and Stocks and Shares?

If you have a Cash based investment you will receive a set interest rate. During low interest rate environments, returns on cash are generally lower and inflation can erode away earnings potential, so some investors prefer to take on a little more risk for potentially higher returns. It’s important to remember that regardless of the level of risk, a stocks and shares JISA is invested in the stock market and the value of the Junior ISA can go down as well as up and your child may get back less than was invested.

Can a child take over Child Trust Fund (CTF) at 16?

Once your child turns 16, they can either:

  • Take over the account by contacting the CTF provider
  • Leave the registered contact in charge of the account

When your child turns 18, they will automatically take over the account and can take out the money.

How does a child take over at 16?

If your child wishes to take over the account at 16, they need to contact their CTF provider who will advise them on what they need to do. Your child will not be able to withdraw the money until the age of 18. The parent is not able to stop this.

What happens when a Child Trust Fund (CTF) matures?

When your child turns 18 the account will cease to be a CTF. Your child will be sent a communication prior to maturity outlining their options upon maturity, which will consist of either opening an adult ISA or taking the money.

What control does a parent have throughout the life of a Child Trust Fund (CTF)?

If you’re the main contact for the CTF account you’re called the ‘registered contact’. You have certain responsibilities until your child turns 18, unless your child chooses to take control of their own account at age 16.

Your responsibilities as the registered contact are to ensure the following:

  • The CTF is with a provider that provides an appropriate Cash ISA or Stocks and Shares ISA that meets your desired risk appetite
  • The address and other personal details are correct and up to date
  • Switch to another provider should your circumstances change and your current provider does not have an appropriate product offering
  • Any investment decisions whilst acting as the registered contact

Does the Child Trust Fund (CTF) affect benefits?

Money in your child's CTF account will not affect any benefits or tax credits you receive, and neither you nor your child will pay UK income tax or capital gains tax on money earned in a CTF account.