Do you still get 250 Child Trust Fund? That’s the number of children that HMRC are able to reach in each year from January to December, when there are fewer children turning up for appointments. The problem is that as the children begin to reach age 16, their CTFs begin to subside, and they’re no longer able to access the funds.
“This means that at age 16 it is no longer possible to open a new Child Trust Fund – the existing CTFs have expired, and the Government has decided that it is better to move on to the next generation of CTFs. It is important to know that at this point, no one Child Trust Fund will be able to meet all the child’s living expenses, and that at age 18 it will be more likely that the child will have had the chance to switch away from their current CTF provider.
“It is highly recommended that parents actively encourage involvement and start the education process into the principles of savings and money management now, so that when they turn 18 they are well placed to do so. Continuing to invest the money is not always the best answer, but it should always be considered when making a financial decision.
“It is also important to note that while the primary objective of Child Trust Funds is to provide financial security for children, their value can be enhanced by inbound assets, including those from family and friends. In addition, while the CTFs are a tax-free way of saving, they are not without their share of risks.
That’s the number of children that HMRC have found who were incorrectly placed with a CTF, and who have since been found to be innocent. It’s important to know that this number does not include children who have already reached the age of 18, so it’s important to check the age of the children you have.
Do you still get 250 Child Trust Fund? Of course not! But, like savings, pensions, and investments, they can be a lifesaver in the face of a serious financial challenge. Here’s more on how they work…
There aren’t many Child Trust Fund products around to transfer in to (we only list one cash CTF below, for example), but if you’re in a low interest Child Trust Fund and you want to transfer in to a new one, or you want to switch from a cash Child Trust Fund to an investment version or vice-versa, you still can.
To transfer, simply sign up with the new provider – it’ll inform the old one for you. Ask the new provider to move the money for you and inform the old provider it is being moved. You can’t split the CTF if you transfer it though – you must transfer it whole.
These have strict operational limits, including a maximum charge it can lop off your investment each year (1.5%). The good news is that you can’t be charged fees to transfer the CTF.
But remember, IFAs are only guessing too: by the nature of investment, they can and do get it wrong. This is an attempt to predict the future, so there’s no guarantee their guess will be any better than your own.
If you can, examine the investment options yourself, making sure the charges aren’t too high. Different funds have different levels of risk. After all, putting your cash in a fund tracking a wide range of large UK companies is likely to be less risky than one specialising in Indian small tech companies.
Do you still get 250 Child Trust Fund? The short answer is ‘yes’, but the long answer is ‘no’. The reason for this is that children can transfer out of a CTF within 14 days “but it’s highly likely that they’ll have already done so by the time they reach 18.
“There’s no right answer. Some parents will argue that keeping their child’s CTFs as low as possible is the best answer, as the CTF Fund is managed by the state government, and their decisions about when a child reaches the age of 18-1)
There are three types of CTF that parents can choose from: “Asset Free”, which invests solely in stocks; “Inventive”, which invests in innovative new products and services; and “Treasury”, which manages the majority of the CTF Fund.
The choice of type of CTF has a huge effect on how much the child is entitled to, and whether they will be able to work their way up the corporate ladder. While it is generally considered better to have a CTF than not have one, there are circumstances in which having a CTF is better, such as when the child has a physical or mental condition that makes it more likely they will not be able to work up the right level of experience to take over the management and investment decisions (such as a child with a physical or mental condition that prevents them from standing up straight or from continuing to talk)
It’s important to know that while the CTF Program is responsible for the safekeeping of their child’s CTF, they are not the only party who can transfer out.
