Alternative to CTF?

blue70

My eldest daughter was born a few months too early to benefit from a CTF voucher. At the moment she has her savings in a Halifax Save4it account but is there a way of investing in something similar to a CTF Eg Equities moving into cash as she nears 18?
Thanks

ReportInvestor

Why not go for DIY on this "stakeholder" investment ethic?

It would only require three extra transactions from you in 13 years.

Something like:

Set up equity investment with you as trustee.
Encash 30% when she is 13 - moving back to her Halifax account.
50% of the remainder when she is 15
50% of the remainder when she is 16.5
The rest when she is 18.

And if she gets any regular or irregular additional sums from relatives, put these in the equity fund until she is 12 and then into the cash fund afterwards.

Milarky

blue70 wrote:

My eldest daughter was born a few months too early to benefit from a CTF voucher. At the moment she has her savings in a Halifax Save4it account but is there a way of investing in something similar to a CTF Eg Equities moving into cash as she nears 18?
Thanks

[Opps! Just noticed that this post really applies to those with children young enough to receive CTF vouchers - which the OPs eldest daugther isn't! But any younger children might of course!]

I was just going to say that while the CTF money from the gov't must go into a CTF, there is no requirement to add any of your 'own' money to this (although the gov't does allow this upto £100 per month I believe) Thus you could just set up a basic CTF but select a non CTF product (of which there are many) in your child's name and save into this also. The basic difference is money you add to a CTF can grow 'tax free' (although it will be 'post tax' income that you save) whilst money you save on their behalf is taxed according to normal rules (£100+? income pa will be charged to parents but less than this to the child's personal annual allowance.)

But CTF withdrawal rules are pretty onerous in comparison with the discretion you can give yourself when saving more conventionally. So I'd like to ask for the views of others on how the benefits of saving into a CTF rather than outside one (assuming a budget of £1200 and no more) would stack up. It seems to me that the small amount of 'tax liabilty' (there may actually be no tax in practice) from not using the CTF outweighs the meagre benefit of (largely notional therefore) 'tax free' saving.

Anyone?

dunstonh

investment trusts or unit trusts are available for this purpose. You set them up in your name re: child initials.