CTF discussion area

ReportInvestor

The Financial Services Compensation scheme would cover your child for 100% of the the first £2000 saved and 90% of the next £33,000.

Smaller building societies also tend to be taken over by larger societies in the event that one runs into any difficulty so that the BS movement retains investor confidence.

Sometimes takeovers lead to compensation for members . Children have received windfalls on demutualisation at Birmingham Midshires and Bradford & Bingley.

Mergers between mutuals are a different matter. Under 18s, not being voting members at societies, have not received compensation e.g. Staffordshire BS members received £100 minimum from the Portman BS at the end of 2003, but kids got nothing . I think that's mean.

An outside bet is that Ipswich BS ** (offering a 6% CTF) will be snaffled up by Britannia BS in due course. Followers of the Tractor Boys know that Ipswich play at the Britannia Stadium.

Nationwide, Skipton, Furness, Britannia, Ipswich and Hanley Economic BSs all offer cash CTFs at the moment. Their capital ratios that give an indication of reserves strength are all sound [higher indicates strength]. All of them made a reasonable profit in 2004.

Nationwide 6.7% (April 04)
Britannia 7.8% (Dec 04)
Skipton 7.76%
Furness 6.59%
Hanley Economic 7.57%
Ipswich 6.78%

The first three are all top 7 societies. Nationwide's capital strength is greater than the banks. You won't go far wrong with them, if you still have concerns.

** It sounds like Martin was giving some good publicity to the Ipswich BS CTF last night on TV - See this link

puno

OK, I've opened a CTF with the Childrens Mutual, going to take Martins advice and save some money elsewhere but...

Can I open an account in my sons name but keep control of it until I decide to sign it over?

A lot of childrens accounts seem to hand over control at the age of 11, which is worse than the CTF. I would prefer to have total control in deciding when this handing over of money happens!!

ReportInvestor

The Telegraph

Two new Cash CTF providers Leeds BS & Monmouthshire BS open up shop

They both pay 4.75% with a 1.25% bonus over the first two years for those who top up the voucher.

"...but the Leeds & Holbeck CTF Bonus Saver requires you to add at least an extra £600 a year, while Monmouthshire offers the bonus after payments of just £250 a year."

These may suit some if a branch is close, and I personally think L&H (now actually Leeds) BS is a proven, trustworthy provider.

More importantly, we needed a bit more competition in what was a worryingly limited market place. At some stage all those bonus rates will expire and the tiny Ipswich BS's 6% rate will succumb to reality

abpjds

Hi,
Having read various newspaper articles about CTFs, the HSBC UK Growth and Income Fund was mentioned several times as a good managed stakeholder fund. But in Martin's article it is only given a small mention, and it is described as a tracker fund, when I understood that it was actively managed. Is this a mistake?

ReportInvestor

You are correct. It is in the UK actively managed funds section.

Having said that, it's three year performance (+20%) is almost exactly the same as the average tracker fund (+21%) and of the average actively managed fund (+21%), so it may be a "closet tracker".

It beat the HSBC's own 100 Index Tracker Fund by 6% but not the HSBC 250 Index Tracker Fund which was top of the sector with 19% more.

craig22

PLEASE HELP!!!! We have 2 children, therefore 2 vouchers, and would like to invest in a high return CTF. (yes i know also high risk). We will not be adding to the fund as we have other saving schemes. Can someone please tell me where we can put the money that will yeild a high return, Stocks and shares??? As you can see i have no idea what i am doing so some guidance would be great. Thanks in advance.

chubbski

I want to put some money aside for my youngest, who unfortuantly was born before the vouchers were introduced (2 months!). We already had an endowment policy for our first child and wanted the two to get something similar when they grow up. Do the CTF's apply if you havent got a voucher? and is it worth cashing in the endowment for our eldest (8 years old) and setting up a similar CTF?

or should I buy more lottery tickets!!!!

paedwar3

My child was born in the UK in April 2003. We moved over to the USA in August 2004 for a temporary stay (maybe up to 5 years) for business purposes. After that we will move back to the UK.

Does anybody know where do we stand with regards to the government voucher?

Am i right in assuming that if we had left the country after the vouchers had been posted, we would still be entitled to use them?

System

I have been asked to sort out the best place to invest my baby grandsons Child Trust voucher. Now i have read whats on the government website and i have read this thread beginning to end, but maybe its late, and i really ought to be in bed but i have a few questions.

I do not want to gamble away with Djs, money so i will be investing it in a low risk building society account. I am not interested in perks such as vouchers and stuff and am only interested in getting the best value for the money for the low risk investment. It wont be added to, so i dont have to take that into consideration either. Now the questions are:

1. Will the rate vary from time to time, or does the interest rate stay constant at the rate its advertised at at the time of investment? I notice the higher paid accounts are advertised at 6% interest, so i am wondering if these rates are guaranteed for the period of time they are invested into.

2. Can you take it out of the one account if it is performing badly and put it into another higher paying account? Just by leaving it in one account, leaves it vunerable if there are fluctuations of interest rates.

3. I would need to invest it in an account that can be dealt with via post or via the net, but what would happen if the building society decided that they no longer wish to deal with these trust funds on the website or by post? Since neither my son or his girlfriend drives, it would be not too easy to get somewhere of distance, just to be able to manage or deal with the account if it was necessary. I am just worried that the building society will move the goal post thats all.

No doubt i have other questions, and will no doubt post them when i have thought about them.

Plasticman

Hi Judi,

I'm no expert, but as nobody else has posted I'll have a go!

Judi wrote:

1. Will the rate vary from time to time, or does the interest rate stay constant at the rate its advertised at at the time of investment? I notice the higher paid accounts are advertised at 6% interest, so i am wondering if these rates are guaranteed for the period of time they are invested into.

I'm afraid that they vary. I'm not sure if any still offer 6% as many rates have recently dropped.

Judi wrote:

2. Can you take it out of the one account if it is performing badly and put it into another higher paying account? Just by leaving it in one account, leaves it vunerable if there are fluctuations of interest rates.

Yes, you can move it at any time.

Judi wrote:

3. I would need to invest it in an account that can be dealt with via post or via the net, but what would happen if the building society decided that they no longer wish to deal with these trust funds on the website or by post? Since neither my son or his girlfriend drives, it would be not too easy to get somewhere of distance, just to be able to manage or deal with the account if it was necessary. I am just worried that the building society will move the goal post thats all.

If this happens then you can move it to another building society.

Hope that helps!