Common Child Trust Fund (CTF) Enquiries

What are the features of our Child Trust Fund (CTF)?
The Child Trust Fund (CTF) can be a savings account or an investment plan for children. The Government will make a starting payment into the fund and another payment when children turn seven. Family and friends will also be able to make contributions.

The money in the fund will belong to the child but they will not have access to it until they are 18. This is so that they have some savings and investments behind them at 18 to help make the most of future opportunities. The child will not be taxed on the interest and gains they earn. Our Child Trust Fund invests in stocks and shares and the value of the fund will go up and down so the child may get back less than invested.
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Is my child eligible?
A child is eligible if he or she has been awarded child benefit, is living in the UK and was born on or after 1st September 2002.
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What if my child is ineligible?
If your child does not satisfy these criteria, you can still save for him or her. There is a wide range of savings funds on the market specifically for children.
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What is the initial investment?
If your child is eligible, a voucher for £250 will be sent to the child benefit claimant, who will usually be the parent, which can be used to open a CTF. If your child is part of a household receiving Child Tax Credit with a household income below the Child Tax Credit income limit (currently £13,480), your child will receive an extra £250.
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What do I need to do?
If your child is eligible, a voucher will automatically be sent to the child benefit claimant, along with an information pack setting out what to do with the voucher. You do not need to make a separate application for a voucher.
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What do I need to do when I receive a voucher?
You'll receive an information pack setting out what you need to do a few days before you receive your voucher. The voucher can be used by someone over 16 with parental responsibility for the child to open a Child Trust Fund with a provider of their choice. If a fund is not opened before the voucher expires (12 months from issue), HM Revenue & Customs will open one for your child.
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Are there different Child Trust Funds?
There is a range of different Child Trust Funds available to suit people's needs. All providers have made a stakeholder fund available. Charges for this fund are kept low and the fund is designed to give good returns over 18 years by investing in the stock market. The risks are controlled by making sure that there is a mix of investments and that they are less risky as the child nears the age of 18. When parents do not open a fund for a child within a year, the Revenue will open a stakeholder Child Trust Fund for that child. Providers will provide information on any ethical policy guiding the investments they make for a CTF fund. Our Child Trust Fund invests in stocks and shares and the value of the fund will go up and down and the child may get back less than invested.
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Can I open a normal bank fund with the Child Trust Fund voucher?
You can't do this. The voucher can only be used to open a Child Trust Fund for your child.
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What tax will my child pay?
Your child will not pay tax on the money in their fund. Under Financial Services Authority rules, Halifax must make it clear that when referring to tax-free. In this instance it means that the Child Trust Fund  will be managed so that income and gains will be free from all personal tax. This does not take into account tax that may have been paid on investments received within the fund or taxes paid by the fund before reaching the child. Tax rules may change in the future.
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What are the effects on family benefits and tax credits?
The money in your child's fund will not affect any family benefits or tax credits while the fund is open.
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What access do I have to the money in my child's fund?
Any money in your child's fund (whether a Government contribution or a contribution from family or friends) belongs to your child and will be locked in until your child reaches the age of 18, at which point your child can choose what to do with the money. No-one else has access to it, including you.
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What are the restrictions on how my child can use the money?
There are no restrictions on how your child uses the money when they reach 18. All children now receive financial education to help them manage their finances with future needs in mind.
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What contributions can be made to my child's trust fund?
Anyone can contribute to your child's fund. Parents, family, friends and your child can make contributions of up to £1,200 between them each year. Remember that no money can be taken out until your child reaches 18.
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What are the annual payment limits?
The limit of £1,200 applies to each year separately. You can't pay more in one year if you have paid less previously. Each year for this purpose runs from your child's birthday one year until the day before your child's birthday the next year.
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