Child Trust Fund

A Child Trust Fund (CTF) is a savings and investment account for children set up by the government.
CTF Logo

Basically, all children born on or after 1st September 2002 receive a £250 Child Trust Fund voucher to start their Child Trust Fund.
When they reach the age of seven, they receive a further £250 payment.

The Child Trust Fund belongs to the child and can't be touched until they turn 18, so that children have some money behind them to start their adult life. The great thing about the CTF scheme is that, like an ISA, there is no tax to pay and on income and gains in the Child Trust Fund. You can't dip into in to buy that new TV or DVD player. As if you would!

The aims of the CTF:

Ensure your child has savings at the age of 18
Help your child get into the habit of saving
Teach your child about the benefits of saving
Help your child understand personal finance.

The Child Trust Fund is a great idea, wonder what £500 it will buy in 18 years time? Perhaps it will just buy enough to fill a tank with petrol!

The good thing about it is that you can also pay into the fund on your child's behalf. You can add £1200 to the fund each year. However, being a parent is expensive enough and most parents don't have much spare cash. How about putting some Child allowance money away?

Child Trust Fund cheque

There are only a handful of CTF registered banks. We banked our cheque with Family Investments. The whole process was very easy and I liked the Mr.Man style website. They can pop an information pack in the post for you, just click on the banner (right).

Key features of the Child Trust Fund:

A long-term savings and investment account.
Your child (and no-one else) can withdraw the money when they turn 18.
Neither you nor your child will pay tax on income and gains in the account.
£250 voucher to start each child's account.
A maximum of £1200 each year can be saved in the account.
Money cannot be taken out of the CTF once it has been put in.
The Government will make a further contribution when your child is seven.
There are many types of CTF account, you choose type of account.

CTF booklet, free and sent to parents automatically

This is the booklet you receive about the CTF.