Child Trust Funds, I NEED HELP!!!!!

Betsy_D

Hi all,

I've just become the proud father a of beautiful little girl called Betsy!

Im wanting to set up a Child trust fund, but im really baffled as where to go. I did want to lnvest onto the stock market but my partner doesnt want to do that so im only looking at intrest related accounts. Do the accounts always track the bank of england rate fo interest or do you get a fixed rate now that will stay for 18 years? Also can you switch elsewhere after a certain period or are you tied in with one company for 18 years.

Any help please?? Also can anyone recommend a CTF to invest into??

Cheers

Dale

dunstonh

I've just become the proud father a of beautiful little girl called Betsy!

Congratulations.

I did want to lnvest onto the stock market

Makes total sense given the small amount and the long term.

but my partner doesnt want to do that

Can you not educate her on the differences?

Cash version is likely to still be worth around £250 in real terms more or less in 18 years time. The amount is tiny so isnt it worth a punt. Or perhaps use a mixed asset fund that has some in stockmarket, some in fixed interest and some in cash.

or do you get a fixed rate now that will stay for 18 years?

No chance of an 18 year fix.

Also can you switch elsewhere after a certain period or are you tied in with one company for 18 years.

You can switch.

Betsy_D

Nice one, cheers for all that.

I did want to add a monthly payment of around £40 - £50. This is why my missis didnt want to put it into the stock market. Unless we just use the £250 to the stock market and set up another account in our name (ISA etc) and pump the cash into that??

zvinis

I have just recieved my yearly statement for my sons CTF stakeholder account and out of the £600 paid in only 154.84 hasnt been lost. This is extremely worrying and I am seriously considering freezing the account and starting up a savings account instead. I would love some advice on this matter

dunstonh

This is extremely worrying

Why? Chances are its a combination of charges (which are front loaded) and a bad year. A bad year is a good thing in the early years. It now buys units much cheaper and it will be those units which go on to make the most money.

Investments zig zag. Always have, always will. You dont get continuous good years. Its impossible to keep getting 20% a year and not expect a minus 20 or minus 40 in there at some point. You average out the good and the bad.

wriggly

Betsy_D wrote: »

Nice one, cheers for all that.

I did want to add a monthly payment of around £40 - £50. This is why my missis didnt want to put it into the stock market. Unless we just use the £250 to the stock market and set up another account in our name (ISA etc) and pump the cash into that??

Put the £250 in a shares-based investment and put the regular payments in an account in the child's name. Children's Savings Account usually pay relatively good interest, and you can fill out a form (R85?) to ensure no tax is taken off.

wriggly

zvinis wrote: »

I have just recieved my yearly statement for my sons CTF stakeholder account and out of the £600 paid in only 154.84 hasnt been lost. This is extremely worrying and I am seriously considering freezing the account and starting up a savings account instead. I would love some advice on this matter

Even in the current downturn that's a spectacular loss. However, the only real chance of getting back to the £600 level and above is to stick with share-based investments - it may be worth considering transferring to a different fund though.

dunstonh

Even in the current downturn that's a spectacular loss.

Its probably not fully linked to the downturn. More likely front loading of charges. A lot of these child plans are based on friendly society plans and endowments and are very expensive and the first year takes the brunt.

littlemissjojo

I have just had my statement for my DD who was born Feb 2003 (fund set up in 2005 when government started paying out the vouchers). So have been paying £10 a month since May 05. This year the statement shows:

Value at December 2007: £669.54
Value at December 2008: £676.41

So its gone up by £7 odd quid when I have paid in £120! So thats £113 lost! And nothing to do with front loaded charges as I am 3 years down the line!

So the government encourage you to save money for your children, and then you lose it all. Nice.

I am considering stopping paying into this and just leaving it to do its own thing, and pay the money into a conventional savings account, at least then it wont disappear!

dunstonh

So its gone up by £7 odd quid when I have paid in £120! So thats £113 lost! And nothing to do with front loaded charges as I am 3 years down the line!

That makes more sense and is far more acceptable and to be expected.

So the government encourage you to save money for your children, and then you lose it all. Nice.

You havent lost it. Investments zig zag. You dont get growth every year. You have to average out the ups and downs. Indeed, just a few years in, 2008 loss is actually good news for you as its now buying far more units which will be the ones that make the most money in the long run.

pay the money into a conventional savings account, at least then it wont disappear!

It will just be eroded by inflation and not get any real capital growth.