Have you recently received a letter from HMRC that includes some information about Child Trust Funds (CTFs) and want to find out more? Or have you heard about this from your school friends? We hope that we are able to provide you with some helpful information in this article and on our Child Trust Fund Hub.
The history of Child Trust Funds
The CTF was a Government savings initiative introduced in 2005 and was back dated to children who were born after the 1st September 2002. If you were born in the UK, and your parents were receiving Child Benefit, your parents would have been given a voucher (of monetory value) from the Government to place with a CTF provider. The Government issued the last CTF vouchers on the 1st January 2011 so any child born after this date unfortunately missed out, but instead could take out a Junior ISA, albeit with no Government voucher.
What is a Child Trust Fund?
It's a savings plan which can be invested in cash, or in stocks and shares (like the CTFs we hold). The Government limits the amount that parents, family and friends can contribute each year. This is currently £9,000 and the contribution year runs from birthday to birthday.
We are the only provider who offered a Shariah compliant CTF. All the CTF rules and contribution limits are the same, but the CTF fund is only invested in accordance to Islamic Investment Guidelines.
Wherever the money is saved and whoever saved on your behalf, your CTF is only accessible when you turn 18. Prior to that, the money has been locked in this savings account until you reach 18, so none of the gift payments could have been reclaimed by anyone. On your 18th birthday you will be given access to your CTF.
Do I have to take control of the Child Trust Fund?
No, although in HMRCs National Insurance letter it states that you should take control of the administration of your CTF you do not have too. You have the option to do this if you wish, but whoever is the current Registered Contact (the person who manages the CTF) can continue to be the Registered Contact up until your 18th Birthday.
Visit our CTF hub for more information and your options