The cost of life insurance


Stakeholder schemes were introduced by the Government in April 2001 for Pensions and 2005 for children’s savings products, such as Child Trust Funds (CTFs). The aim of a Stakeholder product is to offer customers a straightforward, low-cost and risk-controlled approach with minimum standards.

When the Government introduced CTFs in 2005, and gave all children born in the UK between 1st September 2002 and 2nd January 2011 a monetary voucher to place with a CTF provider, the person with parental responsibility had the option to place it in a Stakeholder or Non-Stakeholder CTF. If the voucher was not placed within a year after being issued, the Government allocated the monetary voucher to a Stakeholder CTF provider.


So what is the difference?

Comparing them side by side, the table below provides the criteria set out by the Government that a Stakeholder CTF has to meet, compared against a Non-Stakeholder CTF.


Stakeholder CTF

Non-Stakeholder CTF


Minimum contributions

 £10 (for both monthly and single contributions).  This can be higher than £10.

Making a contribution

Will accept contributions by Direct Debit, direct from your bank and cheque. No rules, and therefore can be limited.

Where the CTF invests

To provide a risk-controlled approach to investing, the CTF must invest in a fund with a diverse range of assets which must include shares. No requirement for diversification of assets. It can be invested in cash, shares, bonds and so on.

Annual management charge

No more than 1.5% per year. No rules and therefore can be higher.

Entry charge

No charge. No rules, therefore a charge can be applied.

Exit charge

No charge. No rules, therefore a charge can be applied.

Switching fees

No charge. No rules, therefore a charge can be applied.


There were over 6.3 million Child Trust Fund accounts set up for children born between 1st September 2002 and 2nd January 2011. According to HM Revenue & Customs, over 4.8 million of these accounts (79%) were Stakeholder CTFs, leaving 21% Non-Stakeholder (17% Cash and 4% other).

Child Trust Funds are long-term savings accounts, and since savings cannot be accessed until the child reaches 18, many accounts have been opened for 10 years or more. Generally, if you are looking to save for more than 5 years, you have more potential for greater returns when you invest in the stock market. Of course shares do go up and down and you could get back less than you put in, which is why a Stakeholder Child Trust Fund make so much sense – as your money is invested in risk controlled funds.


Your Child’s CTF is a Stakeholder CTF

Your Forester Life Child Trust Fund will be a Stakeholder CTF invested in the Halifax UK FTSE 100 Tracking Fund, which meets all the requirements of a Stakeholder CTF.

What happens to Child Trust Funds at age 18? Find out more