Top Child Trust Funds Article Discussion Area

juabbo

Hi all,firstly i apologise if my question has been asked before.
My daughter has a ctf that i'm pretty sure is an investment type with hsbc but she was awarded a small amount of compensation from an accident and as her litigation friend i have been tasked with investing it for her(check in my name).I have 14 days to do so and i'm a little confused as to wether she can hold 2 seperate ctf's or not?
Can i open another ctf for her and run both or do i need to merge them?
If so i would like to open the new ctf and them merge them both to being a savings style.Possible or not?
In an ideal world i would like to leave the original where it is and open another savings ctf so we have one saving and one risking.
Thanks in advance for your replies,
Julian.

Tarquinius

juabbo wrote: »

Hi all,firstly i apologise if my question has been asked before.
My daughter has a ctf that i'm pretty sure is an investment type with hsbc but she was awarded a small amount of compensation from an accident and as her litigation friend i have been tasked with investing it for her(check in my name).I have 14 days to do so and i'm a little confused as to wether she can hold 2 seperate ctf's or not?
Can i open another ctf for her and run both or do i need to merge them?
If so i would like to open the new ctf and them merge them both to being a savings style.Possible or not?
In an ideal world i would like to leave the original where it is and open another savings ctf so we have one saving and one risking.
Thanks in advance for your replies,
Julian.

You can only have one CTF and you'll need to check with HSBC what the terms are for adding additional funds into the one that you have. You cannot open a second one

But, bear in mind that many on this forum are disappointed with the inflexibility and charges that some CTF providers offer. You need to be sure that the CTF is the right vehicle for the funds you now wish to invest, because once committed you cannot move the funds out of the CTF until the child is eligible to take control.

I am not trying to put you off - just be sure this is the best home for the money given your investment goals, flexibility and charges.

xylophone

It doesn't have to be in a CTF?
You could hold it as her trustee until she reaches the age of majority?
You could use a savings account (although rates are poor at the moment) or a fixed rate bond or perhaps consider an investment trust or OEIC held in bare trust
example here http://www.sit.co.uk/products/investing_for_children/features/questions_and_answers/

juabbo

Thanks to you both,
a judge has ruled that i must invest the money into a ctf or similar with a rate of around 3% ,i am keen to do this and leave it there(with possible flitting from ctf to ctf to ensure a good rate),so i suppose the straightforward answer is to invest it into the hsbc fund after finding out if i can transfer this to another ctf as i'm not keen to take too much of a risk with whats due to her.
I'll check with hsbc,
Many thanks,
Julian.

wriggly

juabbo wrote: »

Thanks to you both,
a judge has ruled that i must invest the money into a ctf or similar with a rate of around 3% ,i am keen to do this and leave it there(with possible flitting from ctf to ctf to ensure a good rate),so i suppose the straightforward answer is to invest it into the hsbc fund after finding out if i can transfer this to another ctf as i'm not keen to take too much of a risk with whats due to her.
I'll check with hsbc,
Many thanks,
Julian.

While it is tempting to transfer the CTF to a Cash CTF, note that over the long term, cash savings are likely to barely keep up with inflation. Over 10+ years, a share investment is likely to increase more than inflation, although it may have significant ups and downs while doing so. The Stakeholder CTF, which is probably what you have if you don't know what you have, has elements that reduce the risk as the CTF (and the child) gets closer to maturity.

Also, the government announced in the budget that CTFs will shortly change to Junior ISAs. This may lead to the possibility of splitting your investment, some in cash, some in shares.

In the meantime, if don't have time to setup a Cash CTF and transfer the existing CTF before the 14 days, ask HSBC if it is possible to add the cash to the Stakeholder CTF without investing it.

xylophone

Don't forget that there is a limit to the amount that can be paid into the CTF each year (which in the case of the CTF runs from birthday to birthday).
https://www.gov.uk/child-trust-funds/overview
The £3600 increases to £3720 in the next birthday year.
As for getting 3% - http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

The CTF is transferable if the new provider allows.

Chris-191

We have a child trust fund which has been running since April 2004. I read in yesterday's financial section of the Mail on Sunday that following the Budget it was now possible to transfer those funds into a Child ISA. Is this now the case and if so are there advantages to doing this

juabbo

Just a quickie to say many thanks for all your help,opening a ctf with yorkshire bs and transferring the share ctf with hsbc over to the new one and changing that to a savings style.
Much appreciated,thankyou.

Tammer

[erQUOTE=Chris-191;60203887]We have a child trust fund which has been running since April 2004. I read in yesterday's financial section of the Mail on Sunday that following the Budget it was now possible to transfer those funds into a Child ISA. Is this now the case and if so are there advantages to doing this[/QUOTE]


I think they said there was going to be an initial 12 week consultation period and I guess it would have to wait until the Finance bill.

davewright13

Would it not be best to do a poll here for the best one?