CTF discussion area

Fairy-Home

cloud_dog, donal_f:

I too have had my daughters CTF with SelfTrade since birth, 4+ years now. Initially, although the account was opened and I invested in a self-selected FTSE250 tracker, they didn't register the voucher which resulted in the government opening another CTF for my daughter. It took me about 2 years to sort all this out with the 2 providers and the government but I was relieved when it was all sorted out.

Yesterday, I too got the letter regarding the introduction of the annual management fee of £35 + VAT and, to be honest, it made me quite angry. :mad:

FYI, I have only invested the voucher and invest elsewhere for me childrens future as I don't want them blowing it all on their 18th birthday. With other investments I maintain control over the fund.

I don't think there is any choice in leaving the CTF with selftrade as, being a non-stakeholder I would lose the £35 +VAT each year which means in several years time, there will be nothing left.

I'm about the start looking for alternative providers but expect it will be a week before I reach a conclusion. I imagine if Selftrade have introduced this AMC then others may follow, so I will be considering all types of CTF including the vanilla savings accounts at this stage.

Initially I'm out to find a CTF which allows me to invest in a suitable ETF/Index tracker with low fees and no AMC.

I'll update here with what I find/decide. Let me know if you've found anything or made any decisions yourselves.

donal_f

Thanks Fairy-Home,

I have been investing the maximum each year for my son - so I would have £4k or so in ther by now if it wasn't for the Stock Market falls! However, within a year or two the £37.50 will be under 1% for me - so I could just about live with that charge if there was nothing better on offer. But, if I could find a better account, I would certainly move - but I really want the ability to buy and sell individual shares.

I look forward to hearing your update and will let you know if I find anything.

(I plan to not allow my kids access to the money even after they are 18 - until I feel they have a worthwhile use for it - eg University Fees or a deposit on a flat).

Regards,
Donal_f

Fairy-Home

donal_f:

(I plan to not allow my kids access to the money even after they are 18 - until I feel they have a worthwhile use for it - eg University Fees or a deposit on a flat).

Out of interest, how do you intend to not allow your kids access to THEIR child trust fund? As I understand it, it is their trust fund, in their name and they decide what to do with it on their 18th birthday and there is nothing you can do to stop it. Hence, my reason for an alternative investment which I can control.

cloud_dog

donal-f and Fairy-Home, thanks for the recent posts.

Regarding the not allowing them acces to it, I'd be interested to know how you will do that; it is legally the childs money, in exactly the same way a 'normal' savings account opened in the childs and your name is legally the childs money after age 7 (as far as I am aware).

Regarding options...... Well there aren't too many. As I've mentioned my AMC currently equates to just under 1.5% (about £3k atm, we topped the account up to £1500 and its roughly doubled in value over the last 3 years). Soooo, the AMC is identical to other stakeholder CTF's, although hopefully as the investment grows the AMC as a %age will be reduced.

I am not looking to put any more money in to the account so therefore either the AMC and dealing costs starts to erode its value or I reconsider my investment strategy and invest some in an investment producing a yield.

From what I can see, ignoring the bog standard CTF's, and the non-stakeholder CTF's, the best for investment choice would be F&C. Having said that the range of investment funds is wholly inadequate for my strategy.

Here's a link to the Gov list of CTF providers (desn't make encouraging reading):
http://www.childtrustfund.gov.uk/templates/Page____1243.aspx


Soooo, any thoughts / suggestions would be welcome.

cloud_dog

Have just found this....

http://www.aitc.co.uk/Press-centre/CHILD-TRUST-FUND-WEEK---WHAT-ARE-THE-INVESTMENT-COMPANY-OPTIONS/

Having looked at the charges (dealing and AMC) none of them look particularly attractive (not for the amount I am looking at).

donal_f

Fairy-Home wrote: »

Out of interest, how do you intend to not allow your kids access to THEIR child trust fund? As I understand it, it is their trust fund, in their name and they decide what to do with it on their 18th birthday and there is nothing you can do to stop it. Hence, my reason for an alternative investment which I can control.

A couple of options come to mind:
- I may not tell them it exists.
- I will just tell them they're not allowed access to it. My parents had savings in my name when I was that age and I was only allowed to use it for University costs. If I end up with kids who go against something like this, I will have many other problems also!

Fairy-Home

I have just spoken to Selftrade on the telephone and the guy I spoke too said that a decision had been made late last week to NOT charge an AMC on CTF's. :j

I guess they realised they were going to lose all there CTF customers.

He said to expect a new letter in the post this week.

I have checked the website and found nothing to confirm this yet but will check daily and also await my letter in the post. If I haven't heard anything by the end of the week then I'll be back onto them.

Guess that puts my search for an alternative CTF on hold...and everyone else's too!

LXGB

Just tried to phone Selftrade, gave up after 20 minutes in the queue. Good news if they are cancelling the CTF AMC increase!

multimillionaire

Kindly need some help please from fellow MSE'ers...

Looking to open a CTF with F&C or The Childrens Mutual - wanting a tracker style fund ideally.

Any experienced users of the above have any helpful opinions on which of the above to use please? - any personal experience is greatly appreciated.

I have read the mse article and I'm hesitating a little on TCM, wondering if F&C is really better or if any other opinions/concerns exist?

Thanks in advance.

MM

donal_f

Fairy-Home wrote: »

I have just spoken to Selftrade on the telephone and the guy I spoke too said that a decision had been made late last week to NOT charge an AMC on CTF's. :j

Great news - thanks for the update!