child trust fund

A child trust fund is a long-term savings and investment account introduced by the government to help give children a head start when they reach 18. Every child born on or after 1^st September 2002 receives a £250 child trust fund voucher from the government.

Children from families receiving full child tax credit will get £500. You, your family and friends can add to your child’s account, and the combined payments can be up to a maximum of £1,200 per year – starting from your child’s birthday and ending the day before their next birthday. Anyone can contribute to a child trust fund but the combined total of all contributions must not exceed £1,200 per subscription year. Contributions from the government don’t count towards the yearly limit.

When your child reaches 7, the government will contribute another £250 voucher (£500 for families in receipt of full child tax credit) to be paid into your child’s child trust fund account.

Many child trust fund account providers set the minimum amount you can invest at £10. The child trust fund from Engage Mutual accepts payments from as little as £5 and we have a number of different convenient saving methods to choose from. Apply online today.

No, once a contribution is made, it belongs to the child and cannot be refunded to the person that paid it in. The child will only be able to access the funds when they reach 18.

Our child trust fund is a stock market based Child Trust Fund account that aims to achieve long term capital growth, whilst spreading the investment risk by investing in shares across a range of companies listed in the FTSE 100 index.  Many experts agree that if you’re making an investment for the long term, the stock market is a good place to put your money. However, as with most stock market based investments the value can fall as well as rise and your child could get back less than has been paid in.

 

As it is a stakeholder Child Trust Fund account, 'lifestyling' will automatically apply unless you tell us otherwise.

Lifestyling helps to manage the risk of the investment and means that when your child turns 13 the money invested will gradually move from the medium to high risk fund to the medium to low risk fund. By the time your child is 17 all the money will be invested in the medium to low risk fund. Read more about lifestyling and how the account works. 

Just an annual management charge of 1.5% of the fund’s value, that’s guaranteed not to rise for the life of the child trust fund account.  

The 1.5% is deducted directly from the fund, not from the account. We calculate the charge daily on the value of the entire investment fund. The charge is then deducted on a daily basis from the fund's income and is reflected in the daily share price.

You have a year to choose a provider to invest your child trust fund voucher with. If you don’t choose a provider within this year, HMRC will automatically invest the child trust fund voucher for you.

You can always transfer that investment to a provider of your choice, but the sooner you open a child trust fund account, the sooner your child’s money can be invested where you want it to be.