CTF FAQs

• What is the Child Trust Fund or “CTF”?

  • The Child Trust Fund, launched on 6th April 2005, is a Government sponsored savings and investment account
    for children. It aims to incentivise families to save and to teach children the benefits of saving.
    Every child born in the UK will have a Child Trust and each child's CTF will "kick-started" with an
    endowment of £250 from the Government.

• Which children will qualify for a CTF?

  • All children born on or after 1st September 2002 are eligible for a CTF if child was born in the UK and child benefit has been awarded.

• Do I have to apply for the CTF?

  • No. Entitlement to a CTF endowment is automatically triggered by a claim to Child Benefit and the CTF endowment, in the form a voucher, will be automatically dispatched to the parent who registered the claim.

• Will my child get £250 or £500?

  • Every child will receive an endowment in the form of a voucher for £250. An additional £250 will be paid directly into the CTF accounts of children in families that are eligible for full Child Tax Credit.

• Will the parent receive the initial money in cash like Child Benefit?

  • No. You will be issued with a CTF voucher which you must submit to an approved CTF Provider together with that Provider's completed CTF application form. What happens if I never redeem the voucher?
    
     

• What happens if I never redeem the voucher?

  • Twelve months after you have been issued with a voucher, if you have not presented that voucher to a CTF provider, HMRC will open a Stakeholder account for your child with an approved CTF Provider. In these circumstances HMRC will let you know with whom your child's CTF has been opened.

• How can I find a CTF Provider?

  • A list of CTF Providers and distributors will be sent to you together with your CTF voucher.
    This list can also be accessed on the internet at the following address: www.childtrustfund.gov.uk

• Who will provide the CTF accounts?

  • It is likely that a range of banks, insurance companies and investment houses will set themselves up to run CTF accounts. The government will issue a comprehensive information pack to help parents choose a provider and decide what type of investment would suit their circumstances best.

• How much could a £250 Stakeholder CTF be worth in 18 years time?

  • If £250 grew by 7% per annum over the 18 years, then it would be worth £456* (assuming an inflation rate of 2.5%). To build any sort of substantial sum, additional annual contributions will be required.

• Can my child's CTF be accessed early or can I withdraw cash from it at any time?

  • No. Family and friends can only pay into a CTF account. No withdrawals can be made as the account is ring-fenced for the child until he or she reaches the age of 18 when they become the ‘owner’ of the money.

• Can I still save for my child in other ways?

  • Of course you can. Some people may find the CTF too restrictive or want to retain control over the funds until they feel their child is ready for it. Parents are free to save in any alternate savings plan or building society account. This does not affect their entitlement to the basic CTF amount.

• Any other questions?

  • Email to CTF@4thekids.co.uk

  * Figures obtained from the Inland Revenue’s ‘Detailed Proposal for the Child Trust Fund’ (released 28/10/03). The 7% rate is an illustration and actual returns will depend on the movements in the stock market, which fluctuates in value both up and down.