CTF discussion area

davidjwest

Keris wrote:

Does anyone know if there's anywhere ethical I can put the money?

Thanks

Ethical CTF

This one is, there may be others too, it's on my to-do list of things to add to my site, an indication as to which providers offer "ethical" products.

David
https://www.ctfguide.co.uk

averagepunter

Ickle_Steve wrote:

How about the offering from F & C?
http://www.fandc.com/

Shares account
Choice of six different investment trusts and a deposit account
Choice of UK and International investments
No initial charge
No annual plan charge
Minimum lump sum contribution £300
Minimum monthly contribution £25

This looks like a fairly attractive option to me. Seems quite flexible with ability to switch between the six trusts and also no exit fees if you want to change providers.

CSandL

My grandma has given me £250 to invest for each of my children.

They both already have a baby bond and the younger one qualifies for a CTF voucher but the other one doesn't.

I don't want to put any more into the CTF because I want them to be the same but....

what can I do with the £250 each?

davidjwest

Hi Kerry

I think you'rea bit stuck here as the government in their infinite wisdom have given one of your children £250 and the other £0 so they're by default not going to have the same.

What you could do is make sure you put the same amount of money (£250?)into the baby bond of the child without the CTF to make up the shortfall, but it's not an ideal situation.

Or, from your Grandma you could put £375 into a baby bond for child a and then put the rest £125 plus the £250 CTF voucher into a CTF for child b - £375 each in effect. Not exactly what your Grandma wanted but I'm sure she'd uinderstand?

Not ideal as the baby bond and CTF might not grow at the same rate but perhaps the best compromise.

Don't forget the government are proposing to put some more money (currently £250) into every childs CTF after 7 years.

One other point to bear in mind is that the youngest child has longer for their fund to grow and so it may end up being more than the eldest childs.

Does this answer your query? - sorry it's a bit confusing!

David
https://www.ctfguide.co.uk

CSandL

thanks David,

I'll ponder on your wisdom!!

Kerry

carpool72

I'm dithering like Karen and want to know what others think about this... is it better to make the most of the high interest offers on the cash accounts (ie Britannia 6%), then when the period is up switch to share-based, or are the share-based accounts likely to outperform even after their fees are knocked off?
I thought I'd probably go for a stakeholder product long-term since this is money we didn't have so I'm less concerned about the risk, but wonder if it's worth making the most of the guaranteed cash in the first couple of years. We won't be adding any extra for the various reasons discussed, but will continue saving what we can in our own names.

davidjwest

The answer to your question really depends on many issues, including how risk averse you are and how much you are investing.

There is a calculator on my website which might help you to answer the questions as you can play around entering various permutations for different growth rates, charges, amounts invested etc etc

Over 18 years, the stock market has outperformed building societies, no matter what 18 year period you choose - although you do need to avoid high charges, for example by not constantly switching funds etc where you may be subject to dealer fees etc.

Having said that I worked out that the FTSE (think it was the 100) has on average gained 8% a year for the past 18 years, in which case the current best of 6% (I think) from a standard cash type deposit CTF isn't bad at all.

You could always put the money into this type of account and change it later, there are no fees for transferring out of a building society style CTF as far as I know.

I still haven't totally made up my mind as to what I am doing with my two CTF vouchers, once I do decide I'll be posting on my site, still 3 weeks to think about it before the "live date" although there may be a backlog so I intend applying a week or two before the "deadline".

Hope this helps!

David
https://www.ctfguide.co.uk

isasmurf

There is a CTF calculator on the Government's CTF website.

David, I'm not sure what the rules are this, but I'd be very cautious about providing this kind of information as you are opening yourself up to being sued at a later date because someone's fund hasn't given them a value your calculator said. At the very least I would do two things. One make it clearer that the results are indicative and they may not get the value given in the calculator and two state the assumptions that your calculator uses (I believe the FSA requires you to do this)

davidjwest

Thanks for the tip, I am working to make the calculator clearer and one thing I am doing is making sure it's clear the results are "for indication purposes only". Currently it does say on the site I'm not qualfied to offer advice, am not a financial advisor and the calculator results say "you might get back" etc.

It's very unlikely anyone can second guess what interest/growth rates will be over 18 years as well as charges etc so the figures are not supposed to be 100% accurate, just a rough idea so parents can compare their various options as well as get some idea of how much they need to put away if they want to end up with say £20k or whatever.

The site is really just a collection of product information so people can see it all in one place to make comparison easier, I don't offer any advice as such or any comparison on my part.

I'm going to get in touch with the FSA to see what they think, if necessary I'll close the site down, but agin thanks for the info, I'll update things to make it clearer etc.

Ickle_Steve

davidjwest wrote:

Having said that I worked out that the FTSE (think it was the 100) has on average gained 8% a year for the past 18 years, in which case the current best of 6% (I think) from a standard cash type deposit CTF isn't bad at all.

This is the discussion I'm trying to make. I've already got an Investment Trust going for our children so the CTF voucher will be all that’s paid into the Child Trust Fund. My dilemma is whether to go for the basic Britannia savings account at 6% or go for a Stakeholder or Share fund with the potential for more growth but at a higher risk. If the growth is only going to average out at around 8%, is the extra hassle worth it for such a small amount?
If there were some more exciting investments rather than just Trackers available under the stakeholders on offer and lower charges then maybe I'd go for that.