Child Trust Fund

A simple start to your child’s financial future.

As a parent, it is extremely important that you are fully aware what Child Trust Funds are and what they will mean for your child in the future. This short guide has been created to help with some of the common questions, preparing you in turn to make the best decision for your child.

What is a Child Trust Fund?

A Child Trust Fund (CTF) is a savings account that is available to children born between 1st of September 2002 and 2nd of January 2011. Every child born between these dates received a voucher from the Government worth at least £50.

What type of Child Trust Funds are available for my child?

There are two types of Child Trust Funds, either a cash, non-stakeholder fund or a stock-market based stakeholder fund.

The Leeds Building Society cash deposit fund, invests your child’s funds in a cash savings account, where any money you pay in is secured and will steadily accumulate interest over the 18 years. This depends on the amount invested and the rate of interest payable on the account.

A stakeholder CTF account is also available. Details of the stakeholder CTF account is set out at HM Governments website at www.childtrustfund.gov.uk. Alternatively, you can apply to The Childrens Mutual. Click here for more details »

How much can I save on top of the Government contribution?

You can contribute a total of £3,600 per year and any growth in the account will be exempt from capital gains tax and income tax. A year runs from the child’s birthday to their next birthday.

Can anyone else contribute to the account?

Yes, anyone can contribute to the account. Parents, grandparents and any other relative or friend can pay money into the account up to a combined total of £3,600 each year.

How soon can I open an account?

The Inland Revenue launched Child Trust Funds on 6 April 2005, however vouchers have been distributed since January 2005. As soon as you receive your child’s voucher, you can apply to open a Child Trust Fund for that child.

What happens if I don’t use the Child Trust Fund voucher?

If you don’t use your child’s voucher within 12 months, the Inland Revenue will automatically open a stakeholder account for your child, with one of the approved organisations offering Child Trust Fund. However, by opening a Child Trust Fund account yourself, you make the decision as to which provider it will be invested with. 

What if I have misplaced my child’s Child Trust Fund voucher?

If you have misplaced you child’s Child Trust Fund voucher you simply need to contact the Inland Revenue and they will issue a replacement. For up to date contact details please visit: www.inlandrevenue.gov.uk

Can I take the money out before my child is 18?

No, the money cannot be touched by anyone, including your child, until they are 18. Once the child reaches 16, they will need to apply to become the Registered Contact on the account. Please bear this in mind when making deposits, as you will not be able to withdraw any of the money, and any contributions made to the Child Trust Fund cannot be returned to the donor. However, special arrangements will apply for terminally ill children.

When will my child have access to their money?

Your child will have access to the money from their 18th birthday.

Is there any restriction on what the money can be used for?

No, after their 18th birthday, your child can spend the money on anything they choose, for example, university fees or a deposit for their first home.