Child Trust Fund (CTF)

Let’s begin with the good new – they’re obsolete. If you don’t already have one then you can stop reading here and shuffle over to our section on Junior ISAs.

If you or you children do have one, then we still have good news for you – as of April 2015, the government will allows CTFs to be transferred into Junior ISAsSee here for further information 

 

What do you need to know

  • A long term tax free savings account for children born between 1 September 2002 and 2 January 2011
  • No new accounts can be opened
  • You can continue to subscribing to existing accounts
  • Contributions are limited to £4,000 per annum (Same as JISA)
  • any returns are tax exempt
  • the child has full access to the funds when they reach 18
  • at the age of 18 the CTF can be transferred into an adult ISA to maintain the tax free status

 

Background

Child Trust Funds was a government program available to children born between 1 September 2002 and 2 January 2011. They were seen as attractive both due to the tax exempt nature but also as the government paid an initial deposit of £250 into the account.  There are currently over 6 million CTFs is existence.

 

What was wrong with them

There were a number of problems or criticisms with the CTFs, including 

  • low or poor choice of investments
  • poor returns
  • high charges

For further information there are a number of articles available on the internet that detail the problems and issues that holders faced, which lead to their ultimate demise. 

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