Top Child Trust Funds Article Discussion Area

Spandy

My son currently has a CTF with Unity Mutual, a default provider. I'm keen to move that to an execution-only broker* and so he can buy and hold an investment trust instead. After trawling google, I can't find any cost comparison; I would be grateful for your suggestions of who to use. Thanks for your time and consideration.





*one which charges per transaction rather than an annual % fee

barnishroader

Hi,
My son has a CTF with Britannia and to be honest i hadn't realised i should move it to a Junior ISA.
I have been onto the Tesco website as they are linked as the best option that allows online access, but i can't see a link anywhere to allow me to transfer from a CTF.

The only mention is where it says "Children with a Child Trust Fund are not eligible for a Junior Cash ISA." so is this saying that a transfer isn't possible with Tesco?

I need something with online access as being in Northern Ireland i cannot call into a branch for most of the building societies mentioned eg Coventry or TSB

cloud_dog

Spandy wrote: »

My son currently has a CTF with Unity Mutual, a default provider. I'm keen to move that to an execution-only broker* and so he can buy and hold an investment trust instead. After trawling google, I can't find any cost comparison; I would be grateful for your suggestions of who to use. Thanks for your time and consideration.

*one which charges per transaction rather than an annual % fee

Not a recommendation but, I recently transferred my child's CTF to X-O JISA.

No platform charges but trading charges of £5.95 per trade (plus 0.5% stamp duty for ITs usually).

For awareness, they do have an account closure fee of £50 (should this be a consideration).

I have had my ISA with X-O for a number of years. They are very basic but perfectly adequate. The younger generation may find the lack of an 'app' etc a problem

Morporkian

Hi, can anyone help please?

My daughter's CTF is with Foresters Financial, originally Children's Mutual, we opened it when she was 11 and she is 12 years old now. At the time we chose he stakeholder option and since they scrapped the CTF scheme we haven't swapped it. I pay in £120 a year (£10 a month) but it only increased by just under £35 this year and so I am losing money, obviously. There were a good few years I wasn't getting the letters after a split with her Dad and I kept forgetting to change the account once we were allowed, which is obviously all my fault.

I am very keen to do it now though as I don't want it to continue to lose money. If I'd have known it was this bad, I'd have done it sooner. I just haven't got a clue where to start! I'm absolutely not fussed about making huge amounts of money, I just want to not lose the money I am putting in as I really can't afford to. I don't know what the fees would be for transferring it elsewhere.

Help please?? �� Thank you.

Tammer

Hi Morporkian,

First thing to do - don't panic!

Secondly, there are some things to be aware of:

• Child Trust Funds (CTF) were closed by the Government in 2011. You can still pay into them but if you take out a new one now, it is a Junior ISA. You may have had one set up when your kid was a baby that you've started to pay into now they're 11?
  
  
• It looks like your CTF is invested in the stock market. This means that, over the long term, the returns your kid will get will be much, MUCH, greater than saving (investing) in a bank account. In the short term, values can go up or down but it is important not to be spooked by this.

• You say that you are "losing money". If have been paying £10 a month in for a year or so then the gain you mention looks pretty good to be honest. Have you worked it out in percentage terms? With Brexit etc, stock markets are really volatile just now and some have fallen in value by 10 to 30%.

I believe that the Forester Financial charges are quite high at around 1.5% per year. However, for small contributions and a small fund value they are not surprising or outrageous.

If your aim is to use the CTF to teach your daughter a little bit about the value of investing over a long time, and not to blow it when they're 18, then it could all be a very worthwhile and profitable exercise for you both.

Regards,
T

xylophone

Would you be happier with a cash JISA?

It would be possible to arrange for the CTF to be transferred to a JISA.

At the moment, Coventry BS is offering 3.6% on the JISA.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

Tammer

Hi,
Reading back over your post, you may have meant to say you've been paying into the CTF since your daughter was 1?


The thing to do is - don't panic. Take your time.

How long do you expect the money to stay invested for? My son has a CTF (he's now 8) but I'm hoping he won't cash it in when he is 18, or at least not all of it.

The issue you have is that the fund your money is being invested in is not a strong performer, possibly due to the charges. However, over the long term it should outperform cash. With a cash CTF you are guaranteed to have a low return over the long term, and almost certain to lose money in real terms, unless you are really proactive in switching every year.

I've only paid in small amounts to my son's CTF, and the charges are quite high too, but the fund is a good performer so it's doing quite well overall. I thought that I could show him the value in investing small amounts for a long time and I thought it doesn't matter much if it all goes wrong (as the sums involved are small).

Dab123

Hi Morporkion,


I am in a similar situation, I have just joined this forum to get advice from others who may have similar ChildrensMutual / Forester CTFs
I started 2 policies for my children who are 10 and 11 with Children's Mutual. It is a non- stakeholder type, the fund is called Invesco Perpetual income 1
I have been saving monthly ever since we got the initial £250 from the government. I've only recently looked at the balance ( I never bothered with it, I just presum d it would be growing) and it is currently less than I have invested!
I phoned foresters , they were not very helpful, they said I could switch Fund provider, there was 9 different ones and I should research them !
I could also switch out of non -stakeholder type account and go for a stakeholder one instead. I'm not sure what the benefits of that are?
It's disappointing, as I thought over time the stocks and shares CTFs should grow.

Not sure what to do , has anyone been with Foresters (non-takeholderCTFs) ?
Should I switch?
Or is it just performing poorly at present, I know these unit prices fluctuate?

cloud_dog

This is a difficult one to answer as it is difficult to get comparative performance figures for this specific fund in relation to the underlying Invesco fund.

From what I can surmise it is a UK income fund and using the basic Invesco Income fund for reference, it doesn't appear to have performed well; under performing the benchmark over previous 5 years by approx 20%. This fund has also only returned 22.7% (based on the figures linked to) over the last 5 years. So not particularly good, in the context of the investment growth we have seen over the last 5 years generally.

Unfortunately you probably didn't help the situation by choosing to invest in an income fund. Whether focussing on a UK only fund is also something that may have been better to have a more global focus.

The Foresters fund also carries a 1.66% charge (as far as I can tell) from the CTF Fact Sheet, which in today's terms would be considered high.

My inclination would be to switch the investment in to a global investment for growth (ignore income as it is not relevant in these circumstances). Referring back to the Forester Fact Sheet there really doesn't appear to be a lot of choice for a global investment fund.

xylophone

Sell within the CTF and then transfer to a JISA with Vanguard?

https://www.vanguardinvestor.co.uk/need-help/answer/can-i-transfer-existing-isas-and-junior-isas-to-vanguard

https://monevator.com/using-vanguard-lifestrategy-funds-life/