MSE News: Quarter of parents ignorant of child trust funds

Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
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edited 4 November 2009 at 6:56PM in Savings & investments
This is the discussion thread for the following MSE News Story:

"The Government has announced three quarters of parents open a child trust fund (CTF) for their kids within the first year of their birth ..."


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Comments

  • badgermum
    badgermum Posts: 2,922 Forumite
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    My son is now three and as I knew when we were first given the details of setting up a childs trust fund we wouldn't be able to top the trust fund up, as at the end of the month we have no spare money left for any savings I kept putting it off and putting it off until finally it was opened on our behalf, I must admit to not knowing to much of the ins and outs and how it all works. So I am one of the quarter as it states in the report
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  • I am one of the quarter too- i really didnt understand any of it! As far as i understood, no matter which account i put it in, it would go into shares or whatever, so it was a gamble wherever i put it. So they chose somewhere for me- which as far as i knew made no difference whatsoever as its all being gambled away.
    Also, i have a seperate savings account for my little boy, as i could pay £20 a week into the child trust fund account, only for it all to be lost!! My little boy now only has about £50 in his(child trust fund), 2 years on! Whereas my friends child has £700 (also not paying anything into it).
    So i dont understand!?
    Why pay money into the account when your child more than likely won't get the money!?
  • ses6jwg
    ses6jwg Posts: 5,381 Forumite
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    I am one of the quarter too- i really didnt understand any of it! As far as i understood, no matter which account i put it in, it would go into shares or whatever, so it was a gamble wherever i put it. So they chose somewhere for me- which as far as i knew made no difference whatsoever as its all being gambled away.
    Also, i have a seperate savings account for my little boy, as i could pay £20 a week into the child trust fund account, only for it all to be lost!! My little boy now only has about £50 in his(child trust fund), 2 years on! Whereas my friends child has £700 (also not paying anything into it).
    So i dont understand!?
    Why pay money into the account when your child more than likely won't get the money!?

    you can have a cash account ctf which is not gambled in any way shape or form and acts like a normal savings account
  • I kept forgetting to research the best way to invest the child trust fund and by the time I did and had decided on a savings acccount, I had just missed the deadline and therefore the government put it into a Investment Stakeholder Account, my 5 year old sons initial £256 is now worth £199.56. The only winners I can see are the management company who charge 1.5% which is worked out daily and taken into account when the share price is set. I cannot understand how anybody would decide to invest in this way after the fiasco of endowment policies which are similar and how many of us are in a mess because of them. My boys are lucky in that they have substantial savings accounts (it would have been so much easier if I could have put it into this) and I know that DS2 will not have to rely on CTF.
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