CTF discussion area

cloud_dog

The CTF is a tax efficient wrapper (similar to an ISA) it is the underlying investments that grow (or not). It could be that a Baby Bond and a CTF with the same company could be investing in the same / similar investments and therefore returns might be similar.

Without identifying the underlying investments / investment managers its difficult to be sure.

cloud_dog

jolenejolene

Hi,
the Babybond is with the Childrens Mutual (don't know what funds though) and the CTF is a stakeholder with F&C.
Many thanks
Jolene

Karnam

argh

after deciding to go for a stakeholder account at the hsbc, me and oh were delighted to see an offer of applying for it online means you get a free family portrait and picture.....

but my application wont go through online because my little ones surname is different to mine :mad: argh how annoying. must now queue for ages in HSBC to open this.

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Hi jolenejolene,

Sorry for the delay in getting back on this.

Past performance for the Children's Mutual 15 year with profits plans (assuming your baby bond is in with profits) have been quite good - around 6% above average over the full term.

I am impressed that they beat reliable names like Weslyan, Scottish Equitable & Norwich Union. I wouldn't have chosen with profits myself, and of course, past performance is no guarantee, but you might be best to stay with it rather than incurring penalties / costs to switch and start up a new plan.

But check the charges. The key information is the "Reduction in Yield" on the projected returns they would have sent you before you signed on the dotted line.

The information on this link suggests the RIY could be as high as 3.3% on a £25 pm 10 year policy

If it is not with profits then you also need to post what fund it is in, as the Children's Mutual (formerly Tunbridge Wells FS) have had some real stinkers in the past, before they reinvented themselves recently and started to offer some top outside fund managers.

jolenejolene

Hi again,
yes it is with profits (sounds like I should breath a sigh of relief then...!). Is this better than the F&C stakeholder CTF do you think? It really is a minefield to those uneducated in all things financial! Should I put my whole monthly 'allowance' for my new baby's savings into a babybond, the F&C or half and half as my daughters is?
I really do appreciate your posts!
Thanks,
Jolene

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Well if you can afford to invest £25 pm - and given those options - I'd prefer the F&C Investment Trust fund outside the CTF wrappper as the charges are even lower (than baby bond, Children's Mutual CTF or even the F&C CTF) and this is an investment with a long term proven record across several stock markets.

That means it still carries risk but the regular investment reduces risk and the low charges improve your (daughter's) odds.

P.S. Investment Trusts (as oposed to unit trusts or OEICs or baby bonds) carry an additional risk that in a stock market crash the discount to net assets will widen - reducing the value of your investment. Although if this happens before your daughter is 18, this could prove to be a buying opportunity.

jolenejolene

I have a F&C investment trust account myself. I didn't realise you could use one of these instead of a CTF account! Can I put my government voucher in there? Thanks again!

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You can put your voucher in there (at much better value than most other CTFs but worse value than an ordinary F&C account).

So you might choose to do that.

And then open a separate, cheaper F&C account for additional savings .

Sneaky eh? In the Best MSE tradition .

The only thing to watch for (if you go outside the CTF) is if the overall income payable to your child (from your own contributions to this fund and other accounts) rises above £100 pa as then it becomes taxable at your top rate, which is a concern if you are a 40% taxpayer.

Although, quite honestly, the Inland Revenue should be more concerned with investigating Tessa Jowell since she remorgaged a joint home and is claiming that this money, £350K, went into an investment that her husband made on his own .

darkangelmax452

Hi my sister has just received her voucher and is totally lost as to where to invest. Can any one help

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darkangelmax452 wrote:

Hi my sister has just received her voucher and is totally lost as to where to invest. Can any one help

Yorkshire BS 6%
Britannia BS 5.75%
Ipswich BS 5.25%
Are paying the top three savings rates and there's no tax to pay.

ViksB wrote:

Is there anyway you could invest in a building society CTF and then possibly get windfall shares??

Watch this MSE link

To see if Portman are going to pay out windfalls to children when they take over the Lambeth BS.

That should give a clue as to the potential outcomes at Ipswich BS if it chooses to merge with a larger society like Britannia.