Top Child Trust Funds Article Discussion Area

ViksB

Is the letter recent? We had an annual statement from them yesterday but I couldn't find any mention of a fee?

manicmartian

We've had the letter today, and I am most miffed as all 3 children have F and C CTF funds.

Do I change it to a ordinary saving CTF? or another share one?

Im_A_Mouse_In_Need

Same letter received today (annual statement came a few days before)

£25+vat per year seems steep for what they provide

I thought there was a charge cap of 1.5% of account balance on CTFs?

http://www.hmrc.gov.uk/ctf/ctfguidancenotes.pdf

See section 3.9 - possibly applies only to stakeholder accounts?

Sort of feels like the government has wound the scheme up, so nobody is looking out for the account holders any more. So the financial services companies are going to pilfer the cash as fast as they can get away with

I did enjoy the paragraph telling us how the costs of running CTFs have been borne by all the shareholders, whether they participate in a savings plan or not. Perish the thought that the shareholders (who are generally free to do whatever they like with their money, and sell the shares if they wish) should be having to put up with this!

Reaper

If my quick and dirty calculations are correct...
If you stick with F&C and are invested in their cheap F&C Investment Trust fund then you will still be better off than a competitor charging the standard 1.5% if the value of your investment is £4000+

Those with less could switch to a stakeholder with another company all of which seem to charge the maximum 1.5% but they tend to only offer trackers, or switch to a cash CTF:
http://www.lovemoney.com/news/savings-investments-pensions/childrens-savings/18187/the-top-child-trust-funds

ViksB

I am considering moving to Selftrade as it will allow access to lower TER funds as well. If I have read the terms and conditions correctly the CTF does not have the inactivity fees, which means if you only do one purchase a year it will be cheaper. I need to find out how much it costs to transfer out of F and C.

huwcyn

F & C are a disgrace!!! Have just received the letter regarding £25 + vat charge on my son's account. If the market is flat it could be worth nothing in 10 years time. I thought finacial institutions were regulated. What happened to the 1.5% charge ceiling?

I will be moving his money to a Cash CTF this week with Furness @ 3.05%. At least then I know his meagre pot will accrue money rather than diminish. My other two sons have Cash Jisas. It's so unfair that kids are stuck in the CTF which is clearly being abandoned by the government and exploited by the finacial sector. F & C shouldn't have offered to run the scheme in the first place if they were unable to stick to the initial terms regardless of the performance of the market. Robbery!!!

Reaper

As the fee only applies to the F&C Shares account I think everybody including F&C may be overlooking a solution, or maybe F&C know and are keeping quiet about it because they don't really want to keep lots of small accounts running...

According to the Term & Conditions [PDF]:

Can I transfer between the shares and stakeholder accounts?
Yes, it is possible to transfer between the two types of account.
The entire CTF must be transferred; partial transfers are not allowed.
This can be done by completing a simple form available on our website
or from our Investor Services team. Please note that there is only one
fund available under the stakeholder account.

So if you want to stay with F&C ask to switch. The downside is you only have 1 Stakeholder fund choice which is a FTSE All Share Tracker. I can't find the details on charges but I know when I researched it originally the F&C Stakeholder version was charging a TER of 0.35% + 0.7% plan charge which, if it hasn't changed, is a bargain. And being a stakeholder it can never be raised above 1.5%, unlike the Shares version of the CTF

Of course it does depend on you being willing to invest in a FTSE tracker.

Im_A_Mouse_In_Need

Reaper,

That seems a fairly hassle free option - the form to move from shares to stakeholder can be found here:

http://www.fandc.com/uk/private-investors/literature-and-forms/

(General Forms, go to 2nd page of docs listed, then it's 5th one down "Child Trust Fund (CTF) change of instructions form
136k")

I won't pull the trigger immediately in case something comes to light about their stakeholder scheme being pulled or such like

I spoke to them on the phone just now, and forgot to ask about fees to switch. If anyone comes across this info it would be handy

Reaper

There are no fees to transfer out of either type of CTF (see p.18 of T&C), other than the normal bid/offer spread which occurs whenever buying and selling shares.

seanhodges

I won't be switching from the existing F&C share account to the stakeholder account, because it has a minimum monthly investment of £10 and I don't want to add another penny into these crappy products.
It looks like the only alternative to paying ridiculous charges will be to transfer it into a savings CTF.