Child Trust Fund (CTF)

The Child Trust Fund is a government initiative designed to give your child a good financial start in life. It’s designed to help parents save for their children’s future, and it means that all children born after 1 September 2002 will qualify for a voucher worth at least £250.

When you open a Child Trust Fund account at F&C, you can add to this amount (up to a £1,200 each year). Anyone can contribute, including your family and friends. It’s a useful option to help your child finance their future, such as paying for university fees or funding a deposit on a first property. We’re determined to offer you the best opportunity to help you invest for your child’s future.

Child Trust Funds which are flexible and simple to open

At F&C, there are two Child Trust Fund options for you to chose from – a shares account or a stakeholder account.

Child Trust Fund shares account

Shares accounts invest in stocks and shares. Given your CTF account is going to last for up to 18 years, this type of account offers considerable flexibility and a wide choice of investment options, including our range of award-winning investment trusts.

• Minimum lump sum £100 per trust
• No initial charge
• Running costs paid from the trust’s assets, not from your investment
• Choice of UK and international equity investments

Child Trust Fund shares accounts are suitable if you’re happy to invest in the stock market, which has historically provided better returns than leaving your money in a cash savings account.

However, you should bear in mind that past performance is no guide to future performance, and stock market investments can fall as well as rise, so you may not get back the amount you originally invested.

Child Trust Fund stakeholder account

A stakeholder account also invests in the stock market, but must adhere to certain government criteria. These are:

• Minimum investment of £10
• No initial charge
• Charges capped at 1.5% a year
• Can only invest in broadly-based funds to help spread risk
• Must feature lifestyling 

The F&C Child Trust Fund Stakeholder account invests in the F&C FTSE All Share Tracker Fund (an OEIC). Find out more information about the FTSE All Share Tracker.

Lifestyling

‘Lifestyling’ refers to a form of automatic risk reduction. It starts to reduce exposure to shares when the child reaches 13, so that by the time the plan matures when your child is 18, all investments are in cash or low risk assets.

It’s worth bearing in mind that these are guidelines and do not indicate any form of government endorsement. Also, just because a shares account doesn’t qualify as a stakeholder account doesn’t necessarily mean it will be more expensive, just that it doesn’t fit all the criteria of a stakeholder account. 

In fact, it could be the case that the charges on a shares account are lower than a stakeholder account, which would leave more of your money to be invested for your child over the longer term. 

Find out more about our Child Trust Fund account

Benefits of F&C Investments Trusts

As you can see from the comparison table below, our product compares very favourably with other providers. This has been recognised by 'What Investment' magazine who awarded F&C 1st place in their 2007 Readership awards.

Source: F&C. The Child Trust Fund providers listed above were selected from a combination of: the highest number of hits on Google, the popular search engine, under the terms ‘ctf providers’ (as at 30.08.09), and providers listed on savingforchildren.co.uk (as at 30.07.09) under Child Trust Fund.

Our dynamic range of trusts offers low-cost access to global stock markets, and is managed by an  experienced and award-winning investment team.

So, if you’re looking for a CTF, you’ve come to the right place. Whether you’re a parent, grandparent or relative looking to invest for a child, our Child Trust Funds are designed to be an attractive option.

While a savings account can offer security, the returns are often modest. Investing in stocks and shares using a Child Trust Fund has far greater potential over the longer term. That’s because returns are based on the underlying performance of specific companies, which have historically provided much stronger performance than you might expect from a savings account.

However, because stocks and shares can go down in value as well as up, such investment carries a greater risk. So, unlike a bank or building society savings account, your capital is not secure and you may get back less money than you originally invested.