What happens at age 18?
The good news is that the Government has confirmed that Child Trust Funds will not lose their tax advantaged status when they mature.
Six weeks before your child's 18th birthday we will send a letter telling them the Child Trust Fund is with us and that the account will mature. This letter includes your child's Plan number which they can use to open their MyPlans account. Alternatively, they can use their National Insurance number to create the account.
HMRC sends details of your child's National Insurance number, just before their 16th birthday. It can be found on their payslip, P60, tax returns or official letters about tax, pensions or benefits. If your child has not received it, or lost or forgotten their National Insurance number, visit the Government website for details on how to find out >
When your child reaches age 18 their Child Trust Fund with us will automatically invest in a Stocks and Shares ISA, which we refer to as a Matured CTF ISA. The Plan will remain the same as before until your child wishes to add further contributions, open a Lifetime ISA or access the money.
Find out more about my child's options
We are not allowed to accept any further contributions into the Matured CTF ISA. If you have a MyPlans account, please note you will no longer be able to view their Plan online once they turn 18.
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What is an ISA?
As your child’s Child Trust Fund turns into a Matured CTF ISA at age 18, you may be wondering what an ISA is.
An Individual Savings Account (ISA for short) is a popular, tax-efficient way to invest. There’s no UK tax to pay on any growth and income earned from your investments.
Every tax year, starting 6th April, your child can save up to the ISA annual allowance set by the Government, currently £20,000 overall.
Our ISA is the only one on the market that gives your child the option to combine both a Stocks and Shares ISA and Lifetime ISA in one Plan.
Your child can start saving into our ISA from as little as £20. If your child has both elements, this can be split £10 into each.
Our Lifetime ISA is invested identically to a Stocks and Shares ISA, and in the same fund, with the added benefit of a generous 25% Government bonus added to your child’s savings.
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What are their options?
Six weeks before your child’s 18th birthday we will send a letter telling your child their Child Trust Fund is with us and when their account will mature. We will also be providing a link to a dedicated webpage.
Visit the webpage
Once your child's CTF has matured, they can decide on any of the following:
• Simply leave their savings where they are
• Add contributions – Contribute to an ISA from as little as £20
• Open a Lifetime ISA – Save for a first home or later life and gain a yearly bonus of up to £1,000
• Make an encashment – as your child has access to their savings, they can make an encashment
When your child reaches age 18, you will receive a final statement which includes the Child Trust Fund Plan details and value.
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Adding contributions and continuing to save with us
Your child can decide whether they would like to continue saving towards their future. At age 18 any further contributions will be into our ISA.
They can save into our ISA from as little as £20 up to their overall allowance of £20,000 each tax year.
By adding further contributions, your child will be investing in a Forester Life ISA.
The money from your child's Matured CTF ISA does not count towards this.
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Opening a Lifetime ISA
A Lifetime ISA is a tax-efficient savings account available for UK residents aged 18 – 39. Introduced by the Government in 2017, the Lifetime ISA is beneficial if your child is looking to save towards a first home or build up a savings pot for later on in life, with a generous 25% Government bonus for every contribution made.
Our Forester Life ISA also gives your child the option to have a Stocks and Shares ISA and Lifetime ISA under one Plan. Your child can reinvest some of their money into a Lifetime ISA.
The overall annual allowance for an ISA is £20,000, of which £4,000 can be saved into a Lifetime ISA each tax year. If your child has both elements, this can be split £10 into each. Your child also has the opportunity to move money at any time from their Stocks and Shares ISA element into their Lifetime ISA element.
The money from your child's Matured CTF ISA does not count towards their overall ISA allowance. Each tax year they can save up to £4,000 in the Lifetime ISA, the money from their Matured CTF ISA will count towards this.
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Make an encashment
At age 18 your child will have access to their savings and can make an encashment if they wish.
Your child can choose to make a partial encashment and reinvest the remainder into a Stocks and Shares ISA and/or Lifetime ISA.
By making a full encashment, the Plan with us will close. We have a duty to ensure that we pay only to your child as the Planholder, so your child will need to have a bank account in their name so we can make the payment.
Any money encashed will be free from UK taxes.
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What happens if we live abroad?
Your child still has the same options; however, the only difference is that they cannot contribute into the Plan unless they become a UK resident again.
If your child is a non-UK resident when they encash their plan, they should be aware that the amount they receive may be subject to taxation by the tax authority of the territory in which they live.
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How does my child make their decision?
We will be providing your child with a link to a dedicated webpage about their options.
Visit the webpage
Your child can get further help and information from us in the way that suits them best, whether that’s online, over the telephone or through face-to-face advice and use any of these methods to help make their decision.
Tax treatment depends on individual circumstances and may be subject to change in the future. As with all stock market investments the value may fall as well as rise and your child may get back less than has been paid in. A Lifetime ISA must be held for at least 12 months before using it towards the purchase of a first home. By saving into a Lifetime ISA instead of a workplace pension, your child could lose the benefit of employer contributions and the value could affect any entitlement to means tested benefits. If your child makes an encashment before age 60, other than to purchase a first home, they will pay a government penalty of 25% on the encashment amount, and your child may get back less than you paid in.
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I pay into the Child Trust Fund - what are my options?
When the child reaches age 18 and the Child Trust Fund matures, we will no longer be permitted to accept any further payments into the Plan. However, if the child chooses to continue to save with us, you may still be able to gift into their new Plan.
If you have a MyPlans account, please note you will no longer be able to view the Plan online once they turn 18.
Of course, you always have the option to take out an ISA or Savings & Investment Plan with us in your own name, whether to save for yourself, or on behalf of the child, or for you and a spouse if taking out a Savings & Investment Plan.
Did you know, you can contribute to a Child Trust Fund held with us online? Find out more >
Tax treatment depends on individual circumstances and may be subject to change in the future. As with all stock market investments the value may fall as well as rise and you may get back less than has been paid in.
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What fund(s) does the CTF invest in?
All our Child Trust Funds that we manage invest in stocks and shares.
At age 18 the Matured CTF ISA will remain invested in the same fund(s) as before, and you may be wondering what fund(s) the Plan invests in currently.
To find out more about the fund the CTF is invested in and its fund objectives, take a look at our fund information page >
Tax treatment depends on individual circumstances and may be subject to change in the future. As with all stock market investments the value may fall as well as rise and you may get back less than has been paid in.
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