Child Trust Funds discussion area

isasmurf

I'll see if I can answer some of these questions

Newdaddy - The child does not have to be resident in the UK for their account to be eligible to receive subscriptions. So the account will continue, and you can still pay into it but if the child is not resident in the UK they will not receive any further Government payments.

quirkes - The Child Trust Fund belongs to the Child. Every child registered to receive Child Benefit gets a voucher to open a CTF. I don't know the Child Benefit rules, so it depends if Child Benefit counts triplets as one birth or not.

HB - To open a CTF you need a voucher issued by the Government. They only issue one per child, so you can only open one CTF per child.

I'm not too sure of the answer to your transfer question. I think you can, but not too sure. The guidance notes only talk about transferring between a non-stakeholder and stakeholder accounts.

Wiggly_Worm

I'm not very financially savvy, but I must say this site has helped me loads
I'm expecting my second child in March (#1 misses out on the government cash, but more about her later), so hope to get a nice lump sum to start saving with.  Now, I only want to put my money (or my children's money) into an ETHICAL account, so I know that no-one naughty is benefitting from my actions.  Will this be an option with the CTF?

Also, when I phoned one bank (Triodos) to ask about trust funds, they said I would need to sort out terms with a solicitor (as the money will be held in trust for a third party), so soes this mean I have to pay out for a solicitor to sort out this 'free' cash, or does it come with all strings, bells and whistles attached?

And kind of along the same lines, when I checked out best rates to start a similar fund for my 3yr old daughter, none of the much encouraged long-term savings accounts for children came anywhere near the 5.00% gross AER tax-free interest offered by a Smile mini-ISA.  So of course I went for that in the end (it's in my name, but I'll be nice with it ). Was this the best thing to do? Any advice on this?

Thanks guys.  

isasmurf

There is nothing stopping Ethical accounts being provided, it just depends if anyone wants to offer one.  You should ask the bank for their Ethical policy before investing as they are all required to publish it.

I think Triodos was probably getting confused between the Child Trust Fund (possily didn't know about it?) and other trust funds.  Anything that you'd need a solicitor for would be in the regulations I would have thought.

As to your other daughter, there are plenty of Children's accounts paying around 5% or more.  You must be looking in the wrong place.  For example a quick search on Moneyfacts for a 3 year old child brought up these instant access accounts:
SAFFRON WALDEN BS   - Ladybird 5.35% AER
ALLIANCE & LEICESTER   - FirstSaver  5.25% AER
FURNESS BS (local area only)   - Young Savers 5.17% AER
CAMBRIDGE BS (local area only)  - First 5.10% AER
CHELSEA BS   - Ready Steady Save  5.10% AER
PROGRESSIVE BS   - Start Up  5.05% AER
BANK OF SCOTLAND/HALIFAX   - Halifax Save4it 5.05% AER
NATIONWIDE BS   - Smart 5.01% AER

Wiggly_Worm

Oo, ta for that

isasmurf

for example Fidelity Investments are one of the few major players ( i don't count banks because i don't trust em !) who have said that they will be offering a CTF product - but i have been unable so far to get any details from Fidelity as so what their product will be. (the same goes for Norwich Onion).

Fidelity have now announced they will not now offer products under the Child Trust Fund.  They claim their research has indicated parents will not put any money into the fund, making it too expensive for them to run with just the small government contribution.

The government want CTF's to be equity based, but with Fidelity pulling out it looks like they're going to go the same way as ISAs and be predominantly Cash accounts.

Milarky

This has been annoying me, so I hope someone can clarify: Will any child reaching the age of seven between the introduction of CTF next April and September 2009 [When all those born after the reference date for the FIRST payment of £250/£500 start to be seven] get the SECOND government payment?

e.g a child born in 2000 - therefore 7 in 2007. They don't get a first payment because they were born too early. Q: Do they get a payment when they are 7 after the CTF is up and running?

Thanks in advance

Murphy_The_Cat

Thanks for the info Saver Smurf, i was hoping to use Fidelty for Murphy The Kitten.  

I hope that when April 2005 comes around there is a wide choice of providers, because I trust the High Street banks to look after their interests (HHHUUUGGGEEEE profits for them) before mine (0.1% interest on current accounts for me !).

MTC ;D

Fatboy_NSS

Actually everyone who offers a CTF account has to offer an investent option as the default choice, so they wouldn't be able to rip you off with a poor interest rate. Also you can switch your CTF between providers, so if you were getting a poor rate you wouldn't be tied in. Certainly waiting until April 2006 would be a foolish move as you'd miss out on the first year's interest on the initial £250.

Fatboy_NSS

And of course if you're only getting 0.1% on your current account why not switch it rather than whinging? Or even better buy some shares!!

Milarky

This has been annoying me, so I hope someone can clarify: Will any child reaching the age of seven between the introduction of CTF next April and September 2009 [When all those born after the reference date for the FIRST payment of £250/£500 start to be seven] get the SECOND government payment?

e.g a child born in 2000 - therefore 7 in 2007. They don't get a first payment because they were born too early. Q: Do they get a payment when they are 7 after the CTF is up and running?

Thanks in advance

I've found the answer to this question:

At present, only children born after 1 September 2002, no others, can hold a CTF account. Therefore the government has side-stepped the issue of whether all 'rising 6s' before 1 September 2009 should receive the top up payments just announced for those which get the first governemnt payment from Nex year. No CTF, no state top-ups. Perhaps this is what they were really concerned about in not making CTFs available for other under 18s. [It was suggested that they could be made available but without the top ups, you see. When age 7 top ups were announced people would have been bound to ask why children reaching that age after the introduction of CTF could not then get the cash]

Anyway, the obvious question from all this is:

What's avalable in the way of non CTF products for under 18s and what are the tax incentives [if any] available to them?

Thanks in advance