Top Child Trust Funds Article Discussion Area

wobblegobble

seanhodges wrote: »

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.

I think the minimum monthly investment is not compulsary so you can just switch your current investment into the stakeholder product. That's what I was told today when I phoned them but might be mistaken.

Tammer

ViksB wrote: »

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.

Selftrade appears to be temporarily closed to new customers.

See google.

dad62

I also got the F&C letter today. Whilst I'm possibly sympathetic to their reasons for introducing the charge (lots of unprofitable £250 investments in a scheme that appears to have been abandoned by the Government) I think the letter is very underhand as it makes no mention that changing providers is an option.

Switching to he stakeholder account sounds like it might be the most pragmatic and hassle-free option. However I'm a bit miffed with F&C so am tempted to move.

michaels

dad62 wrote: »

I also got the F&C letter today. Whilst I'm possibly sympathetic to their reasons for introducing the charge (lots of unprofitable £250 investments in a scheme that appears to have been abandoned by the Government) I think the letter is very underhand as it makes no mention that changing providers is an option.

Switching to he stakeholder account sounds like it might be the most pragmatic and hassle-free option. However I'm a bit miffed with F&C so am tempted to move.

I agree 100% - no options but paying the fee were presented by F&C

Any other providers with sensible charges and a selection of funds? I see this as 'silly money' as I don't believe in the concept so had it in the high risk 'private equity' type fund and would ideally like to put it in to something similarly 'silly'

benalder284

I don't really mind if F&C have decided that they don't want lots of small accounts - that's a commercial decision for them - but what really gets my goat is the tone and content of the letter they sent and the incomplete details on their website which patently fail to clarify all the options open to account holders and which reminds me of the Interactive Investor charges saga last year.

I also have a smallish amount in a Childrens Investment Plan with F&C on which they also plan to levy an annual charge and have a similar issue with them on how they have communicted on that, although at least there are lots of alternatives.

Although the F&C CTF Stakeholder would be a cheaper option for the CTF, I also plan to look for an alternative offering.

Im_A_Mouse_In_Need

List of CTF providers here, not sure if it is up to date:

http://www.kidstart.co.uk/View/TrustFundProviders.aspx

I had a look at Redmayne Bentley just now, found their charges for CTF shares account here:

http://www.redmayne.co.uk/sharedealing/childtrustfunds.htm

How much does it cost?
The annual administration charge is £20 + VAT.
Commission: 1.65 per cent (minimum £10) per transaction, 'settlement and compliance' charge (£7.50) and any applicable government taxes and duties.

The Childrens' Mutual looks likely to be transferred to Forester Life

The latter do not appear to be accepting transfers in for CTF accounts now, though I may be wrong:

http://www.forestersfriendlysociety.co.uk/media-centre/end-of-child-trust-fund-creates-new-opportunities/

SelfTrade are still not accepting new customers as mentioned above - just checked their T&Cs and it does state that CTFs are exempt from the inactivity fee (no guarantee that will remain the case though..)

Stakeholder transfer looks the easiest alternative for now, especially given the charges are capped to 1.5%

jimjames

Im_A_Mouse_In_Need wrote: »

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?

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!

Has anyone been advised that their charges will be over 1.5% when this is taken into account? If so it would be worth challenging F&C. If no joy then it should be raised as a complaint all the way.

Shareholders are being hit with the same charges too!

Tarquinius

I too was shocked when I received this letter. Thanks for all the useful posts and links - I'm going to be joining the band looking round for alternative CTF shares or stakeholder accounts - or switching to F&C's stakeholder account.

Technically, I'm sure F&C are allowed to do this, as the 1.5% fee cap applies only to stakeholder accounts.

But the issue is that this flies in the face of the ethos of the CTF - the whole point being to provide some (small) capital for kids to use as they become adults - particularly those who otherwise probably wouldn't receive a dime from elsewhere - albeit the execution and policy may be flawed.

Its possible (and likely) that some accounts will be worth nil by the time by the time kids reach 18 - thus the government (through their contribution) are effectively making a contribution to F&C' profits.

The sad thing is (as always) that it is the less financially educated (and often this is the less well off folk, who really would benefit from the government contribution) that will miss out here by not moving their money out of the F&C shares account.

Fundamentally the fault lies with government and regulators who have left CTFs to rot without a thought - as a minimum there is loophole in the freedom to impose any charges on CTF shares accounts that should be closed immediately. I might write to the papers!

Is this something MSE and Martin might champion?

jimjimjimjim

Got my 2 letters too.

I can appreciate there are costs to F&C in running these but why don't they move into the 21st century and move over to email for statements and communication rather than all the bumph they keep sending out.

£30 a year is ridculous and will wipe out most small funds in a few years. Pity the children who find on their 18th that their CTF is worthless...

jimjames

ViksB wrote: »

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

The letter arrived a few days after the statements. So that is another thing that they've incurred additional costs for with 2 sets of postage.