CTF discussion area

wellsie82

hi everyone

i became an uncle a month or two ago and im keen to help my brother and his OH out on their CTF

they've said they're happy for me to run a CTF on the babies behalf and i had planned to look into shares (non-stakeholder) CTF ideally as there was a greater selection of investment choices

ive started reading up a bit more on this today and its come to light that a lot of companies seem to have a high minimum investment. ive suggested to the parents that they might want to put in £5 per month which over 18 years would be worth £1k in todays terms. that of course is without the two lots of £250 they'd get from the taxman

this high minimum amount might rule out the non-stakeholder option (ive read on some sites that companies insist on having £100 regular payments) so im going to look into the stakeholder side too

with the minimum payments into the stakeholder CTF is it £10 per month or £10 per payment? ie could the parents give me £5 per month and every two months i can put the £10 into the CTF via a debit card and invest it (ie on an adhoc basis)?

more importantly i suppose, am i allowed to run this CTF on the baby's behalf? i guess if needs be the parents could set the account up, get internet access and then pass the details onto me. this would in a way defeat the object of me trying to help them out as they would have to do much of the stuff themselves

any help is very welcome folks - thanks!

ernie-money

I too am looking for some help...
I've had a cash savings CTF for my little boy since we received the voucher, as I, by switching accounts a couple of times have been able to get good returns from bonus interest offers etc, but now it seems that all the high rates have run out.
I thought that this might be a good time to shift over to a stakeholder account (being rather cautious with his money and not very knowledgeable about the stock market, I'd rather play it safer and not go with the shares option). I have been thinking that a tracker fund should be a good option, but I don't really know how to find one, ie who offers them and which one would be a good option.
I realise that I have to take the decision myself, but would very much appreciate some sort of a pointer of things to think about, and possible options. I know that Martin's article mention a couple of funds, but with it being over 3 years ago, a lot could have changed since, so any suggestions would be welcome!
Hoping that somebody who understands it all will read this - thanks for your help in advance!

dawnbunny

i have 3 little girls and they all have there ctf money in nationwide just normal account no investing what i wanted ton kow with all these problems with banks is it safe in nationwide or should i move it?

Tammy86

Hi,

Has anyone any idea whether a RBS Child Trust Fund Stakeholder Account is effected by the current situation?

Mike-H_3

Done a little research myself and found a couple of useful articles-

The following article suggests that cash may be the best option and includes comment from an investment ‘expert’
http://www.guardian.co.uk/money/2009/jan/17/child-trust-funds-cash-kids

For the non-stakeholder point of view you can look at this article. It highlights that the last few years have been bad for stakeholder options. It also discusses 3 non-stakeholder CTF’s that have done well considering the market turmoil of the last 12 months.

http://www.thisismoney.co.uk/investing/article.html?in_article_id=472930&in_page_id=166&

I am still not sure which way to go. That said I may put the £250 into an equity fund and drip feed a few pounds extra in. If the market does improve then my little girl will benefit from the market being in such a low position. If it fails to improve or drops again then it will not be a major trauma. At the same time I am putting money into saving accounts for her, effectively spreading the risk and ensuring that she will have a decent pot in years to come.

Hope the links help.
Mike.

sabretoothtigger

If these things are open 18 years then even I would presume the market will improve in that time

Average long term rate of return on the ftse is 3% PA excluding dividends

neenspleen

Hi - got my CTF statement today for my eldest child and it is worth £80 less than this time last year, despite me paying in £130 this year. I would really appreciate advice on whether to stop my payments or not (with 3 kids the £10 a month each is now a noticable outgoing in the family budget). I appreciate that the fund may well improve before she reaches 18 but what shoud I do in the meantime? I think the £130 could have gone to better uses over the last 12 months!
Any advice greatly appreciated...
N

tyllwyd

dawnbunny wrote: »

i have 3 little girls and they all have there ctf money in nationwide just normal account no investing what i wanted ton kow with all these problems with banks is it safe in nationwide or should i move it?

I'm not qualified to give financial advice - but Nationwide seems to be one of the most stable building societies. If all you are worried about is safety, I don't think there is any need to move it just to find somewhere safer.
http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=453093&in_page_id=7

Mike-H_3

neenspleen wrote: »

Hi - got my CTF statement today for my eldest child and it is worth £80 less than this time last year, despite me paying in £130 this year. I would really appreciate advice on whether to stop my payments or not (with 3 kids the £10 a month each is now a noticable outgoing in the family budget). I appreciate that the fund may well improve before she reaches 18 but what shoud I do in the meantime? I think the £130 could have gone to better uses over the last 12 months!

neenspleen wrote: »

Any advice greatly appreciated...
N

I doubt that many people will give you a firm answer on this as most members will not be expert market analysts.

The argument for investing in a ctf that is linked to shares is that the markets should improve. Historically investments in shares outperform those in savings accounts over an 18 year period. However, markets go up and down and this is not guaranteed. There is no way of predicting whether the stock market has ‘bottomed out’ or whether there is another drop around the corner. The crystal balls are all steamed up.

If you want safety then a cash ctf will remove any risk of market volatility. However, make sure the money is in a cash ctf that pays interest above the rate of inflation or you will be technically losing money.

How risk averse are you? Do you feel lucky? Would you rather play it safe?

Remember you can move the money at a later date. If you think shares will be a better option in the future then go for a cash ctf and move the fund when you feel more confident with the FTSE or your preferred investment markets.

JoT1

As the markets round the world continue to experience massive losses, I don't know whether to cut my losses and transfer the money I have left in my 2 daughters' shares based CTFs to a savings CTF. I have always intended to leave them, but I have lost over £450 each in the last year, and am worried that everything we have saved will soon be gone.
However, I know that the shares may well pick up over time and if I opt out now, if and when I want to re-invest in shares (ie when things get better!), the number of units I will be able to buy will probably be much less.
Help please!