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Child Trust Fund

Child Trust Funds are closed to new accounts.
You may be able to open a Junior ISA instead.

What happens to my child's existing Child Trust Fund account?
If it has already been opened, it will continue as usual - and the child will not be able to touch the money until the age of 18. The tax-free element will continue. No tax is paid on any income or gains in the account. Family and friends will still be able to add up to £1,200 a year into the account. The government will not withdraw the money it has already put in the account.

Can I move existing child trust funds into a Junior ISA?
Not at present, although the Government has announced that this will be possible from April 2015.

Types of Child Trust Fund account

There are three types of account.

  1. Stakeholder Account
    Your child's money is invested in companies' shares, so it grows if those shares do well. There are some measures in place to reduce the risks associated with investing in shares.
  2. Shares Account (Non-stakeholder)
    Your child's money is invested in companies' shares, so it grows if those shares do well. Unlike a stakeholder account, there are no rules in place to reduce the risk of investing in shares.
  3. Savings Account (Non-stakeholder)
    This type of account does not invest in shares. It is the cash option and pays interest. If you don't open an account by the expiry date on the voucher, we will arrange for a CTF provider to open a stakeholder account for your child. But your child's money will have missed out on the chance of a whole year's growth.

Will a Child Trust Fund affect my 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 tax on money earned in a CTF account. Remember, a savings account may not increase as much as an account with shares in it, but the value of shares may go down as well as up.

Who manages the Child Trust Fund account?

Although the CTF account belongs to the child, only a parent (if 16 or over), or someone else with parental responsibility for the child (a legal term meaning someone with the rights and duties of a parent), could use the CTF voucher to open an account. The person who opens the account will manage it until the child's 16th birthday, when the child will take control.

I opened a CTF account for my child. What should I do now?

You don't have to add to the account, but even small amounts could grow into something worthwhile for your child when they reach 18.

Let family and friends know you've opened the account as they may want to put money in as well. The total amount that can be put in each year is £1,200 (excluding Government payments).

You can change the account or provider at any time if you want to.

Where can I find out more?

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