Child Trust Fund Confusion

brendan01

Hi, Im new to this sorry, but I've just received the annual statement on how much my daughters Child Trust Fund is worth this year. Im a bit confused and need answers.

The trust fund is with the Alliance and Leicester as I imagined that it would be trustworthy.

Last year the value was £280.98
This year the value is £210.29

This is obviously a lot lower and it doesn't seem right to me. Am I missing something, have I done wrong oris there something that I don't understand? or perhaps she is just being ripped of (a bit harsh at 5 years old).

Somebody please help as I don't know what to do.

Thanks in anticipation

Brendan

WestonDave

I'm guessing its an equity (stocks and shares) based fund rather than a cash + interest type fund. That being the case it has simply suffered along with all stock market investments from the decline in share values. Chances are it will recover and will still give her a better pay out at the end than going the cash route. Nothing is of course guaranteed, but my own personal view on this was that as it is free money it is worth going for the greater return on equity even if there is a risk of a downturn. (Even that can be avoided nearer her 18th by switching to a lower risk fund or even into a cash fund)

With 13 years to go there is little you can do better at the moment especially as interest rates are so low. I took the view that as the market was so low it was potentially worth putting a bit extra in the fund to take advantage of the likely recovery but that depends on your circumstances and views!

Js_Other_Half

I assume you put the trust fund in shares - as did we. As the stockmarket is suffering badly our children's trust funds are not worth what was put in them. Bear in mind shares are a long term investment.

bubblegumcola

My child trust fund amount has plummeted as well, by over £100, I only put in £10 a month as I can't afford anymore so I am more than a bit annoyed that the fund has depleted in value. Mine is in the Children's Mutual ethical one. If you read all the small print you will see its like any investment and is not guaranteed a specific amount, everyone who decided to invest in some sort of shares will be in the same boat. The fund still has a lot of years to go, things change and hopefully the value will go up and improve. Just need to cross your fingers. You could always change your investment to a different type if you really aren't happy with the amount of return but I don't know all the ins and outs of that.

brendan01

Thanks to all that have responded. You've put my mind at ease.