The Child Trust Fund (CTF) is a type of savings account that became available from April 2005. It aims to give children a 'nest egg' they can use when they reach 18. The Government will make a starting payment - in the form of a voucher - soon after the child is born, and a further payment when the child is seven.

Does my child qualify?

Children born on or after 1 September 2002 qualify for a Child Trust Fund. If you receive child benefit for an eligible child, you will receive a Child Trust Fund voucher automatically - this voucher will enable you to open a CTF account on behalf of your child.

How much will my child receive?

The Government will provide £250 as an initial amount. If your family receives full Child Tax Credit, then you’ll be eligible for a higher payment up to £500. The Government will pay a further amount when your child reaches seven. This is likely to be £250 or £500, depending on your circumstances.

If your child was born between 1 September 2002 and 5 April 2005 the initial amount you receive will be slightly more than £250, to take account of the shorter time available for the savings in the account to grow.

How much can I save in these accounts and who else can save?

Anyone can pay money into the CTF account - you can make contributions as a parent or carer, as can others family members, friends, godparents - or the child. The total that can be paid in to the account each year (running from one birthday to the next) is currently £1,200.

What do I need to do when I receive a voucher?

If your child is eligible, a voucher will automatically be sent to the child benefit claimant, along with an information pack setting out exactly what to do. You can open your child’s CTF account, with the provider of your choice, as soon as you receive your voucher from the Inland Revenue.

What happens if I don't open a Child Trust Fund?

If you don’t use your child’s voucher to open an account within 12 months of receiving it, the Government will pay it into an account for your child with one of the approved providers. By opening a CTF account yourself, you make the decision as to whom it will be invested with.

What sort of CTF accounts are available?

There are low-risk accounts and there are accounts with higher risks but each type is tax-free and has its own set of benefits.

- Stakeholder account – invests in equities (stocks & shares) with a maximum charge of 1.5% per annum - Deposit based savings account – secured capital with no charge - Non-stakeholder account – invests in equities (stocks & shares) with open ended charges

The choice is yours and The Hanley can arrange all three types of CTF accounts.

Will I be able to open a normal bank account with the CTF voucher?

No, the voucher can only be used to open a CTF account for your child

Will my child pay tax on the money in the CTF account?

No, your child will not pay tax on the money in the CTF account

When can my child have access to the money?

Only the child can have access to the money and they cannot have access to it until they reach 18. They can then spend the money on anything they choose - university fees, a car or a holiday, or to carry on saving the money in a building society savings account, the choice is theirs.

What about my other children, who don't qualify for the Child Trust Fund?

If your child is not eligible for a CTF they don’t have to miss out, you can start saving for them now with The Hanley Young Savers Account

How can I find out more?
To register for a Child Trust Fund arranged by The Hanley or to find out more simply ring us free on 0800 5428790, visit any of our branches or complete our on-line contact form.

You can also find out more general information about the Child Trust Fund on the Government's Child Trust Fund website:
www.childtrustfund.gov.uk