Managing a Child Trust Fund

Until the child reaches the age of 16 years the only person who can access any information about the child trust fund is the registered contact, although anyone can pay into the scheme up to the capped amount of £1,200. Each year a statement will be sent showing the account's performance. It is the responsibility of the registered contact to ensure that these documents are kept in a safe place and that personal details, such as any address changes, are kept up to date.

Many providers have the facility to view the funds performance on-line. If it's felt that the fund isn't performing as well as expected for whatever reason, the option is always there to swap the fund to a different provider or to a different fund type. Shopping around for a new fund type can seem daunting as there is an immense amount of choice available, which is also a good thing!

When comparing the different providers on cash trust funds you should take a look at the AER. The AER stands for Annual Equivalent Rate calculates the interest for the fund as if it was calculated yearly. This is really helpful as it enables you to compare like with like.

Once the child turns 16 years of age they are then considered old enough to manage the fund themselves. This is a good way to encourage young people to save and to plan for the future. When the child/young person turns 18 the fund immediately loses its tax free status and is able to be drawn out in full and used for whatever purpose is desired.

Alternatively, there is an option to draw on part of the funds and leave the remainder invested either in the current fund or maybe even swapping to a different investment fund such an ISA which will once again provide a tax free investment.

Download the Child Trust Fund PDF Guide here - see our other free PDF guides here

Guide Contents

Child Trust Fund (CTF)
Choosing the best Child Trust Fund
Managing a Child Trust Fund
Government changes to the Child Trust Funds
Frequently asked questions
Where to go for further help and information about Child Trust Funds

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