Child Trust Fund
What are Child Trust Funds?
The Child Trust Fund (CTF) is a savings account for children and is designed to help your child save from an early age. The government starts the savings by giving a £250 or £500 voucher (depending on your financial situation) to each child. The government will contribute an additional sum when your child reaches the age of 7.
The voucher must be put into a Child Trust Fund and can be topped up by parents, family and friends to a maximum of £1,200 a year. The money can only be taken out by the child when they reach the age of 18.
Who receives CFT vouchers?
Any child born on or after the 1st September 2002, living in the UK and registered to receive child benefit will automatically receive a CFT voucher. The CFT will not affect any benefits or child tax credits you receive.
Are there different types of CTFs?
Yes, there are 3 types of CTFs. Many local Credit Unions are now able to offer a Cash Savings CTF Account. This is a long term risk free account. With this account when you child reaches the age of 18 they will be guaranteed to receive the amount paid in plus any interest. The other two CTFs are stakeholder CTFs and non stakeholder CTFs. These are investment accounts and their value can go up or down depending on how the stock market performs, which can mean that they are more risky. Your local credit union can provide you with more information on all these accounts.
Child Trust Funds can help play a role in providing all children, and particularly those from low income families, with an important financial asset for the future.
For further information, visit - http://www.childtrustfund.gov.uk(external web-site)
