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  • FIRST POST
    • deejaybee
    • By deejaybee 11th Sep 17, 7:47 PM
    • 390Posts
    • 90Thanks
    deejaybee
    Removal of "Lifestyling from Stakeholder Child Trust Fund
    • #1
    • 11th Sep 17, 7:47 PM
    Removal of "Lifestyling from Stakeholder Child Trust Fund 11th Sep 17 at 7:47 PM
    Hi

    My soon to be 15 year old daughter has a Stakeholder Child Trust Fund ( CTF ) - One of those that Gordon Brown donated some money to at certain ages -My wife has also paid into it monthly since the start.

    It was originally with Nationwide, was then taken over by Legal & General, and then taken over again by " OneFamily "

    Recently had a letter from " OneFamily" - relevant points below:

    When Stakeholder CTF accounts were launched, they included certain standard features, one of which was lifestyling.

    What is lifestyling ?

    Lifestyling means that as your child approaches their 18th birthday, their investment is progressively moved into bond and cash-based funds.

    What has changed ?

    The Government concluded, and we agree, that lifestyling is no longer needed and that its removal may well encourage a long-term savings habit amongst young adults.

    As a result, we are proposing to remove lifestyling from xxxxxxxxx CTF with effect from 24 August 2017.

    What do i need to do ?

    You dont need to take any action if you accept this change. xxxxxxx CTF will continue to be invested in the same way it always has.

    If, on the other hand, you want lifestyling, you can transfer xxxxxx CTF to another provider who offers this feature at any time, free of charge.
    ===========================================

    As this is a tracker fund, my worry is that IF the stock market bombs in the next year or two, there wouldnt be a lot of recovery time available before her 18th Birthday when the proceeds become available to her - I understood the Lifestyling as a safety net, albeit at the potential cost of fund growth, so i am a bit confused as to why the Government would recommend removing this feature.

    So general advice appreciated, obviously no-one has a crystal ball re where the stock market is headed.

    Also is it possible to transfer CTF to a different type of investment, or is CTF to CTF the only route ?

    Any advise, observations appreciated, thanks.
    Last edited by deejaybee; 11-09-2017 at 7:50 PM.
Page 1
    • dunstonh
    • By dunstonh 11th Sep 17, 8:11 PM
    • 89,502 Posts
    • 54,962 Thanks
    dunstonh
    • #2
    • 11th Sep 17, 8:11 PM
    • #2
    • 11th Sep 17, 8:11 PM
    The Government concluded, and we agree, that lifestyling is no longer needed
    I thought it was the FCA that told firms to review their position on lifestyling. Not the Govt.

    As this is a tracker fund, my worry is that IF the stock market bombs in the next year or two, there wouldnt be a lot of recovery time available before her 18th Birthday when the proceeds become available to her - I understood the Lifestyling as a safety net, albeit at the potential cost of fund growth, so i am a bit confused as to why the Government would recommend removing this feature.
    It has been tested using a rolling 15 year period that in over 70% of cases, lifestyle risk reduction resulted in lower returns. I cant find a copy of that research at the moment but that was the ballpark on the figures.

    Also, a good number of those CTFs went on to be retained as investments for another 5 or more years.

    Lifestyling is a blunt tool which is statistically likely to be wrong rather than right.

    Risk is not on off. 100% equity is high risk and above the risk level of the average UK consumer. Which is why so many different funds exist across different risk profiles. You pick one to suit your risk. If your CFT provider doesnt give you choice then you should move to one that does.


    Also is it possible to transfer CTF to a different type of investment, or is CTF to CTF the only route ?
    Junior ISAs are available.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • deejaybee
    • By deejaybee 11th Sep 17, 8:16 PM
    • 390 Posts
    • 90 Thanks
    deejaybee
    • #3
    • 11th Sep 17, 8:16 PM
    • #3
    • 11th Sep 17, 8:16 PM
    Thanks for quick reply dunstonh

    Food for thought there..
    • deejaybee
    • By deejaybee 11th Sep 17, 8:33 PM
    • 390 Posts
    • 90 Thanks
    deejaybee
    • #4
    • 11th Sep 17, 8:33 PM
    • #4
    • 11th Sep 17, 8:33 PM
    Another Q

    Can a stocks and shares CTF be transferred into a CASH Junior ISA ?
    • surreysaver
    • By surreysaver 11th Sep 17, 8:42 PM
    • 2,248 Posts
    • 1,272 Thanks
    surreysaver
    • #5
    • 11th Sep 17, 8:42 PM
    • #5
    • 11th Sep 17, 8:42 PM
    Yes it can
    I consider myself to be a male feminist. Is that allowed?
    • xylophone
    • By xylophone 11th Sep 17, 11:46 PM
    • 22,881 Posts
    • 13,241 Thanks
    xylophone
    • #6
    • 11th Sep 17, 11:46 PM
    • #6
    • 11th Sep 17, 11:46 PM
    Can a stocks and shares CTF be transferred into a CASH Junior ISA ?
    Yes. Example

    https://www.coventrybuildingsociety.co.uk/consumer/help/savings/isas/junior-isa.html

    If your child holds a Child Trust Fund, it’s straightforward to transfer the savings to our Junior Cash ISA. Ask us in any branch or call 0800 121 8899 and we’ll explain how it works. The registered contact will need to fill in and sign a form, and then we do the rest.
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