Top Child Trust Funds Article Discussion Area

Reaper

snowcat53 wrote: »

Ah thanks for this, but are you sure - I still cannot see this figure

The fund charge is 0.38% and even added to the 0.7% plan charge that comes in at less than the 1.5% that everybody else is charging for Stakeholder CTFs.
Source: Key Facts [PDF]

P.S. [STRIKE]There is a 5% entry charge too, but not sure if this applies to a Stakeholder and if so whether it applies to a switch[/STRIKE] On reflection I doubt it as they are not allowed to charge more than 1.5%pa on a Stakeholder account.

snowcat53

Thanks Reaper . Have posted on the other thread.

RubyBish

I think the best solution would be to allow CTFs to be transferred to Junior ISA, thereby making more providers accessible to us.

Probably worth signing the HL petition on this proposal:

https://www.hl.co.uk/investment-services/junior-isa/ctf-transfers-to-junior-isas


Might also be worth writing to your MP to ensure they are aware of the imbalance of options available between children of different ages.

http://www.writetothem.com/

roo291

Like many I was irritated to receive the letters for my boys CTF accounts (2 days after the annual statements).

We have invested monthly into these accounts and so they are valued at £4,500 (0.75% fees) and £6000 (0.5% fees) - I don't want to jump to another provider if the charges will work out to be more than they are with F&C.

I like having the shares - I think it will be a better investment in the long run and with the "free" bit of the money I have taken the high risk option while investing in the safer investment trust with our monthly contributions. This has def paid off for the eldest whose money was invested first and more than doubled in the first two years before the markets dropped. I live in hope that these risks will payoff in the longrun again and if not it seems that my boys will be no worse off then all those children whose money has been wiped out by fees.

I wondered if perhaps Martin would be doing a guide to this?

Bert_Millichip

I spoke to F&C this morning. After repeatedly asking them what my options were, they offered the option to transfer free of charge to the Stakeholder FTSE All Share Tracker Fund (as mentioned in other posts). The current annual fee is 0.3%. It is capped by government regs at 1.5%. However I was told additional deposits, either as lump sums or by direct debit, attract a 5% charge!

I asked why there was a £25 annual fee on the share account. They said it was to cover administration costs and seperate this from fund performance.

I asked if there was an option of an on-line account with reduced fees, instead of having their admin costs passed onto the customer. The answer was "no" as they felt much of their communication needed to involve posted letters.

Are they expecting to just declare fund performance; excluding admin fees and deposit fees; and expect us to see this as the true picture of the health of the investment?

I have a small fund that will be erroded in 8 years from annual fees alone. Effectively the government's 'kick start' donation will be swallowed up by this financial company and offer no benifit to the intended child.

Reaper

Bert_Millichip wrote: »

I spoke to F&C this morning. After repeatedly asking them what my options were, they offered the option to transfer free of charge to the Stakeholder FTSE All Share Tracker Fund (as mentioned in other posts). The current annual fee is 0.3%. It is capped by government regs at 1.5%. However I was told additional deposits, either as lump sums or by direct debit, attract a 5% charge!

I'm not sure they gave you the correct answer. According to this page the Stakeholder CTF has:
* no initial charge
* no bid/offer spread
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/
So it's hard to see where the 5% charge is coming from. I think the charge (mentioned in the fund factsheet here) only applies when investing in the tracker outside a CTF, but that needs confirming.

priorslee

Just catching up on this in amongst the small forest of stuff received from F&C in the last week. I’ve got 2 kids CTFs & 2 other kids accounts for other savings – as a result I’ve had 4 separate letters & 4 statement packs which amounts to just over an inch of paperwork (+ has cost them 8 lots of postage). There no wonder they need to up their charges – I cannot believe how inefficient their admin is!

Like most others here, I’m very angry about these charges – as well as penalising our kids and taking advantage of weak CTF market position created by the government, it is extremely short-sighted of F&C – if our kids had seen good performing, well-managed savings they would be more inclined to invest with F&C after the age of 18. No chance of that now.

There are 2 specifics in this that I’m particularly annoyed about:
1. F&C must think we are pretty stupid if they think that they can hide behind “£25+VAT” instead of being honest and saying the new charges are £30

2. On 3 of my 4 letters, the charge is £30, but on the 4th, it says £40+VAT, so in total they are looking for £138 a year from me. Haven’t yet worked out why one is higher.

Thanks to others who have posted here – all very useful info for the forthcoming transfer away from these bunch of ####s.

Reaper

priorslee wrote: »

2. On 3 of my 4 letters, the charge is £30, but on the 4th, it says £40+VAT, so in total they are looking for £138 a year from me. Haven’t yet worked out why one is higher.

The CTFs has the lower charge, other savings plans are higher.

priorslee

Thanks Reaper, you are right. Just got off the phone from F&C and what I hadn't spotted was that the accounts were slightly different. For the two non-CTFs, one is a Children's Investor Plan, the other is a Private Investor Plan and it's this one that attracts the higher charge. When asked for the reason why they were different, the person at F&C was quick to apportion blame on 'the previous administrator for the plans'!

F&C said that the CIP & PIP could be merged into a single CIP, but this has to remain separate to the CTFs (so still a charge of £90pa).

FL

I have two CTFs and in the F&C they made 12.6% last year. The balance is about £700 in one and £850 in the other. Based on the top savings account of 3% they would only make £25 each. I think even with the high fee I might keep an eye on the performance and if it goes down alot then change then. Although I have no idea how difficult to change might be. The only problem with the tracker account that they are offering is that the market has gone up alot in the last year and we would be moving at a high level if we went down that route.