The Child Trust Fund (CTF) is a long-term savings and investment initiative set up by the Government for all children born on or after 1st September 2002. It is designed to give children a financial head start in adult life and to help teach them the value of saving. All eligible children are given £250 by the Government to help kick start their account.
Learning about how to make the most of their money is a key part of the Child Trust Fund initiative.
Basic facts:
- If your child is eligible, you will be sent a CTF voucher worth £250 for your child about a month after you first start receiving Child Benefit.
- Once you have the voucher, you need to choose and open an account for your child.
- There are lots of financial providers to choose from, and three types of account.
- Once you've opened it, you then manage the account on your child's behalf. This means checking and keeping statements, letting the provider know if you move house, and if you want to, you can move the account, perhaps if you're not happy with the way the money is growing, for example.
- At 16, your child takes over this role, so that they can make decisions about their money.
- No one, not even your child, can withdraw the money in their CTF account until they are 18.
- The money belongs to your child and when they are 18 they can spend it on whatever they want. For example, they may want to spend it on a computer, a training course, driving lessons, or put it towards a car, university fees or a first home.
- Anyone can put money into the account - you, your family, your friends, and your child when they're older - up to £1200 a year all together.
- Neither you nor your child pays tax on the interest or gains made in the account.
In the future at school, children may learn about:
- managing money and savings
- Child Trust Fund accounts
- financial issues and choices for the future
More information on Child Trust Fund
www.ctfhelp.com - for help with choosing a Child Trust Fund account for your child.
Introducing the Child Trust Fund - a pdf factsheet which you can print out (also available in other languages on the Child Trust Fund website).
Child Trust Fund Calculator - allows you to estimate the possible value of your child's CTF account when they reach 18.
List of Child Trust Fund providers
Article on the Child Trust Fund - this may be useful for discussion in the classroom or with your child.
www.childtrustfund.gov.uk - the Child Trust Fund website will give you all the further information you need.
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