Top Child Trust Funds Article Discussion Area

[cloud_dog]

Originally Posted by emidee

Hi all,

I have 2 children (2 & 4) who both have Cash CTFs, with Britannia at the moment.

I'm looking to transfer both CTFs to the Yorkshire BS as it has a better rate.

Does anyone know whether interest on CTFs is payable daily, weekly, monthly, yearly, etc? I don't want to lose a year's interest by transferring their accounts at the wrong time!

Thanks,
Emily xx.

It doesn't matter when interest is payable, when transferring they will add interest pro-rata for the year, i.e. if you transfer it half way through their year then you will get half the interest. All this assumes there are no special lock in clauses / notice periods etc.

[cloud_dog]

Originally Posted by lozzaw

Hi

I am thinking of investing my child's CTF in the Children's Mutual Society ethical stakeholder account.

My worry is I have seen a lot of reviews on other sites with people saying annual returns seem to be low or negative. Am I right to ignore this? Is this generally a good time to invest in such an account?

Thanks for any help.

I don't think anyone can really answer this as it all comes down to your situation / risk attitude.

Some people look at the CTF money as 'free' money and are therefore happy to take risk with it but....... Its up to you.

[lozzaw]

Originally Posted by cloud_dog

I don't think anyone can really answer this as it all comes down to your situation / risk attitude.

Some people look at the CTF money as 'free' money and are therefore happy to take risk with it but....... Its up to you.

Fair enough. Guess I should just go make a decision and go for it!

[jimothy78]

Hi everyone,
having decided that a stakeholder CTF is the one for us, there seems to be very little to choose between one CTF provider and another as they're all governed by the same regulations and there's no interest rates to compare etc. - am I right in assuming that they all charge the maximum allowable 1.5% fees per year, and if so, I am really just faced with essentially picking at random from the list of 70 or so providers?

thanks in advance,
Jim

[Dazzathomp]

I was wondering if anyone can recommend the best bank or building society to put set up my sons child truct fund, have received 250 from the government and will be adding to it monthly.

Many Thanks

[cloud_dog]

Originally Posted by Dazzathomp

I was wondering if anyone can recommend the best bank or building society to put set up my sons child truct fund, have received 250 from the government and will be adding to it monthly.

Many Thanks

Try reading through MSE CTF article.

[heidiwag]

Does anyone know which child trust fund is best at the moment to invest in? Either of the three choices, stocks and shares high risk, low risk, or the "just savings" one... and who with?

[davidshads]

We would like to open a trust fund for each of our children which they can't access until their 25. Are there any such funds?

[cloud_dog]

Originally Posted by davidshads

We would like to open a trust fund for each of our children which they can't access until their 25. Are there any such funds?

Not sure if you are talking in terms of a Child Trust Fund (CTF), government scheme, or putting the money in to trust for the child.

You would not be able to do what you want via a CTF as the money becomes the childs on their 18th birthday so..... You are left with creating a deed of trust, of some sort, depending on circumstances.

I need to confirm that I am no expert but......

A Bare Trust probably is not what you want as generally these cease at age 18 and the money belongs to the child. I think there are occurances wherer these can go to age 21 (some building society savings accounts may allow for age 21).

You need to decide what rules / constraints are applicable to the money, i.e. is the money to be put in to trust until age 25 and then all the money goes to the child or is the money in trust for the child (age 25) but you have discretionary access for the benefit of the child, i.e. University fees or a car before age 25. I believe this is called a Discretionary Trust. If the money is in your name but 'in trust' for a child any income (or capital gains) will be taxed against you and not the child.

Unfortunately after all of this I don't have an answer for you. In fact I am researching trying to do something similar for my mum who wants to gift a few thousand to each of her grandchildren but for some of the money to be directly attributed to the child (at a certain age) and for some to be managed by the parents with any unused monies going to the child by a certain age.

The only thing I keep comming up with is that you should consult with a solicitor to arrange.

[tali]

I have a CTF in a Freindly Society - are they any good -heard initial charges are high but returns are very good?
Should i stick with it ?

[snugglepet20]

Ok I don't understand how my children's trust funds are working. They both have Childrens Mutual ones. DS is 3.5 and he has £203 in his now which is a substantial loss on what has been put in but DD who is only 1 has £608!

Long term is this going to pan out fairly, the woman on the phone said that DS will have more shares and long term they will be worth more as he still owns all the shares that have been bought but is this even right? Surely they are buying and selling shares all the time not just keeping them all? Also why such great performance for one account and not the other?

I have stopped paying in monthly because I do not want to throw money away but I am a bit worried that DS will feel hard done by if DD gets a lot more money than him. Does anyone understand how it all works?

[new money]

Originally Posted by snugglepet20

...

Long term is this going to pan out fairly, the woman on the phone said that DS will have more shares and long term they will be worth more as he still owns all the shares that have been bought but is this even right? Surely they are buying and selling shares all the time not just keeping them all? Also why such great performance for one account and not the other? ...

As I understand it the general principle of all investments funds (whether it's a CTF or a pension or whatever) is that your money buys 'units' in the fund. The cost of these units depends on the average cost of the underlying investments.

For example, let's say the CTF tracks the FTSE 100. So there are 100 companies and the share price of each is very different. Let's say you invest £100 a month. Every investment company does things slightly differently but the basic idea is that they take your money, put it into a huge pot and buy shares in every company in the FTSE 100.

The investment companies are essentially using an investment method called 'averaging down'. It means that if share prices are expensive your £100 will by less of them, but if share prices are cheap your £100 will buy lots of shares.

Perhaps a better way of thinking about it is if you invest the money yourself in one company. This month the shares are worth £100 each so your £100 buys one share. But over the next 9 months the share price drops and holds steady at £1. You continue investing £100 a month so in next 9 months you accumulate 900 shares, bringing your total to 901 shares, seemingly worth £1000. But in the 11th month the price rockets again to £100 and now your 901 shares are worth £90,100.

The reason your older son won't lose out (according to history anyway) is that when share prices fall his money is buying more units (i.e. shares) and these will be worth more when the stock market rises again.

Hope that all makes sense.

[alfchild]

Hi wondering if anyones had this problem. When the child reaches 1 if on a low income then a extra payment is supposed to be paid. My littleun is now nearly 2 and still not had this money, excuses I've had - sept we have to wait until the tax credits for this year have been looked at, oct and nov we have to wait for notification from tax credit that you qualify. Jan (finalised) I'll chase up for you are you sure they've been finalised???? Still waiting. Annoyed as he is now loosing interest on this and I think it is very unfair to him

[chambta]

Received today the voucher for little Oliver.

Engage Mutual are offering £50 cashback via Quidco. This seems like an almost an unmissable offer to me as it's switchable later if not working out.

Unless it's an absolute dog of a product it's a good offer unless I'm missing something?

[cloud_dog]

Originally Posted by chambta

Received today the voucher for little Oliver.

Engage Mutual are offering £50 cashback via Quidco. This seems like an almost an unmissable offer to me as it's switchable later if not working out.

Unless it's an absolute dog of a product it's a good offer unless I'm missing something?

If you follow this link Reaper has posted a link to a website which may help you decide if it is worth it or not.

[markmas]

Hello there. I have some child trust fund vouchers to invest. Could I ask your opinion on my thoughts on a low cost way to invest them. I have decided that I will be investing in some kind of share tracker. So the decision now is finding the best way to invest.

From what I can see most providers seem to charge the maximum 1.5% annual management charge.

However I have thought that potentially a way to avoid such high ongoing charges is to invest in Selftrades Self-Select Child Trust Fund, then use this to invest in a ETF (Exchange Traded Fund), say a FTSE 100 tracker for example.

Selftrade charge £25 per transaction, then no ongoing annual fees. The ETF will take a fee, but my understanding is that this will be in the range of 0.1 to 1 %.

So although I will pay an upfront fee of £25 the fees over the lifetime of the fund will be lower, especially if I also invest some extra money on top of the £250 voucher.

Any thoughts on this from any of you?

[cloud_dog]

Originally Posted by markmas

Selftrade charge £25 per transaction, then no ongoing annual fees. The ETF will take a fee, but my understanding is that this will be in the range of 0.1 to 1 %.

SelfTrade £12.50 per trade plus any stamp duty (if applicable).

Originally Posted by markmas

So although I will pay an upfront fee of £25 the fees over the lifetime of the fund will be lower, especially if I also invest some extra money on top of the £250 voucher.

Any thoughts on this from any of you?

You are correct but still on £250 thats still a 5% buying charge.

We have our childs CTF in Selftrade but it was made up to £1000 when we started so that I could feel better about the dealing cost.

[lauzjp]

omg, this is really quite complex isn't it. I am due to give birth in about 4 weeks, but am only just starting to look at what changes will happen with tax credits and wotnot... I think we will treat the CTF as 'bonus funds' for baby and will invest high risk. I would like to set up some sort of regular saver for baby, but have a clause where they absolutely cannot have it until they are at least 21. I had £10k at 18 and blew the lot in months.

Therefore I would love to arrange a trust where my child cannot have funds until a certain age, or specifically for a mortgage deposit or something significant like that. Any ideas on how to go about this?

[MrEnglish]

Originally Posted by emidee

Hi all,

I have 2 children (2 & 4) who both have Cash CTFs, with Britannia at the moment.

I'm looking to transfer both CTFs to the Yorkshire BS as it has a better rate.

Does anyone know whether interest on CTFs is payable daily, weekly, monthly, yearly, etc? I don't want to lose a year's interest by transferring their accounts at the wrong time!

Thanks,
Emily xx.

We also have our 18month old sons 250 in Britannia. When I took it out looking through all the options Britannia offered 7% which we thought was the best place for it.

Only now realised when the base rate fell to 0.5% so did our CTF rate.

Its hardly had any interest the last year and a half.


We are expecting another little girl due in 3 weeks so have to decide her CTF and will move our sons somewhere better as well.



Want to wait and see what changes there will be after this Thursdays election.

Any thoughts as to which option is best?

We wish we could put them both into gold and silver, is there any options like this?

[cloud_dog]

Originally Posted by MrEnglish

Any thoughts as to which option is best?

As always define best, not an easy one to offer help with.

Originally Posted by MrEnglish

We wish we could put them both into gold and silver, is there any options like this?

You can do it if you open a Self Select CTF. The one I am aware of (use) is SelfTrade. Within this you pretty much have access to anything you can hold in a S&S ISA, including products which hold physical gold and silver (ETC's etc).

There is a £12.50 dealing charge to buy and to sell so for £250 it works out to be 5%.