CTF discussion area

toshkininny

Thanks ReportInvestor. It was a stakeholder CTF I was looking at, at HSBC.

Does that mean I cannot swap from a stakeholder CTF to a Cash CTF if I wanted to?

mountlake

can one contribute pre-tax cash or is it post-tax only ?? (you guys are knowledgeable and online ! ha ha ha)

ReportInvestor

You only can pay your post tax income into a CTF.

From a parents' point of view, the major tax advantage of the CTF (along with National Savings Children's Certificates) is that parents can pay quite large amounts to their children over time, without the HMRC getting interested in taxing the interest / income.

Currently above £2K from a parent into a child's ordinary savings account may attract the Revenue's interest.

toshkininny

Yes, you're right, I do need to sort it out, and quickly! I think the problem is that there is too much choice these days, and too much information to hand via internet! and having the time to wade through it. (Oh dear, I'm starting to sound like my mother!)

Thanks for your info, though, made things a bit clearer. I just need to decide what option to go for.

ReportInvestor

I'm not mainstream in this, and I don't have a toddler, but this is what I'd do personally.

1) Use the CTF to set up the best savings account possible (Yorkshire BS) and know that as a parent I could add to this over the next 17.9 years with no tax implications. (I'd probably add more to this in the later years, and in the early years concentrate on 2) )

2) Then if other money is available, invest in the stock market on a regular savings basis (thereby spreading risk) - e.g. Foreign & Colonial has a cheap plan - because capital gains, as opposed to income, is not going to worry the tax man AND because there are several children's unit trust and investment trust share schemes that offer better value than CTF share schemes, especially stakeholder CTF schemes.

Prosaic

I read Martin's email yesterday showing that Britannia had now upped their cash CTF to 6.25% for the first 2 years. I've had my daughters CTF with Yorkshire who were at 6%. I checkedthis morning & their site's been updated and is showing 6.25% for the first 12 months, when it drops to 5.55%

Think I'll stick with YBS till the introductory period ends then switch to Britannia to stick at the high rate

Thought this might be of use to anyone about to leave YBS for the higher rate

bylromarha

Looking at stakeholders, currently between HSBC and Schoolteachers. Anyone have any preference about either pls? Thanks.

ReportInvestor

Schoolteachers? Surely it has another name?

Stakeholder?

Why do you want a stakeholder when stock market options with lower charges are available & stock market options with higher performance potential are available?

bylromarha

http://www.schoolteachers.org.uk/

decided on stakeholder as we want some risk, but not lots.

ReportInvestor

The only significant reduction in risk is towards the end of the investment where the equity content is gradually reduced to minimise the impact of any stock market crash just before age 18.

Otherwise the risk is pretty much the same as with many other share investments.

And you are in a tracker fund to age 13 with 1.5% charges (compared to 0.5% charges for tracker funds outside a CTF).

The only clear advantage is that you don't have to review your investment yourself around age 14.