F&C Childrens Investment Plans - New Charges

Be_Happy

I got hit with this letter yesterday too and was so disappointed as it took me so long to decide how to invest £25 a month for my grandson when he was born in 2009.

Knee-jerk reaction was to cancel Child Investment Plan and invest elsewhere, but I checked value and found it was now showing as £1200, so I don't think this is too bad, even cutting it down to £1110 if an annual charge had been deducted. Trouble is that I can't calculate annual percentage rises with regular monthly deposits.

Think changing might just be jumping from frying-pan into fire, so I'll let it roll for another year and see what happens.

johnnyfind

Hmm, decision time, do I pay the charges or move to another provider _pale_

At present I have a £1,400 fund value (£1000 originally invested including the governement voucher) and I don't intend to add any more.

Initially I just happy that they allowed transfers but looking at my other sons account with the Children Mutual it has had next to no growth in the five years it's been open.

Why can't the government get its act together and allow transfers to a Child ISA :mad:

jimjames

johnnyfind wrote: »

Why can't the government get its act together and allow transfers to a Child ISA :mad:

Worth writing to MPs about I think. As there is no cost element to the govt doing it then it would seem to be a sensible option. I guess that means it will never happen!

snowcat53

I am puzzled by this. My son's CTF is with F&C and I have just had the annual statement and there is no mention of any annual fee, not is there anything on the website that i can see.
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

Can someone give me a link or reference please?

JayScottGreenspan

I've got the letter too.

My son's fund is about £450. With these charges, but the time he's 18 there'll be literally nothing left.

F&C are effectively trying to steal childrens' money for themselves.

How many options are there for moving CTFs? Does anyone still accept inwards transfers? The government list looks woefully out of date.

There's got to be something Martin and the government can do about this. It's very cynical.

Reaper

snowcat53 wrote: »

I am puzzled by this. My son's CTF is with F&C and I have just had the annual statement and there is no mention of any annual fee, not is there anything on the website that i can see.
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

Can someone give me a link or reference please?

The page you link to has not been updated yet, but if you click on the "CTF Key Features" PDF on that page it starts by telling you about the fees.

Note that the fees only apply to the popular "Shares" CTF, the standard "Stakeholder" CTF is not affected so if you are using that you are exempt. As I suggested in other threads if you are in the Shares version an option is to switch to the Stakeholder one which is specifically permitted in their T&C, though if you do note that the only fund you can invest in is a FTSE All Share Tracker.

Others have said the £10pm minimum on the Stakeholder account does not apply to transfers but I would check with them to make sure if you do not wish to contribute.

martinman3

snowcat53 wrote: »

I am puzzled by this. My son's CTF is with F&C and I have just had the annual statement and there is no mention of any annual fee, not is there anything on the website that i can see.
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

Can someone give me a link or reference please?

The letter gives the link
http://www.fctr.co.uk/changes/changescip/
for the savings plan but if you look at the first page of the key features document
http://www.fandc.com/documents/ctf-key-features/
you will see all the changes and it will show the haste in which the decision was made.

Too slow. :-)

JayScottGreenspan

Done a bit of research. Two interesting discoveries:

1) There are 'stakeholder' child trust funds out there were these charges are not allowed. I'll be switching to one of those.

2) The F&C letter suggests reducing the impact of the charge by paying more money in. No mention of F&Cs own stakeholder CTF. This is pretty cynical, clearly aimed at funnelling money away from the accounts and into F&Cs pockets, and almost certainly in contravention of the FSA 'Treating Customers Fairly' regulations (which require customers to be informed of their options and given advice appropriate to their circumstances).

martinman3

http://www.fctr.co.uk/changes/changescip/

We will also be introducing an annual account charge of £25+VAT – equivalent to less than £2.10+VAT per month, to cover the ongoing running costs of each plan, which are currently funded by the investment trusts themselves. This will result in the ongoing expenses of each investment trusts reducing.

I thought that the F&C I.T.s charged for their own administration costs not the the costs of the F&C savings plan !
Is this a mistake and have they been found out ?

jimjames

martinman3 wrote: »

http://www.fctr.co.uk/changes/changescip/


I thought that the F&C I.T.s charged for their own administration costs not the the costs of the F&C savings plan !
Is this a mistake and have they been found out ?

Nope it isn't a mistake and they haven't been found out.

Look in the annual accounts and you will see an entry for contributions to running the savings plans which has been the case for many years as it was in shareholder interests to boost demand.

I reckon with RDR they are trying to get their AMC costs down to try to match unit trusts and are doing that by removing any costs that are not core.

EDIT - just click on previously quoted link
http://www.fctr.co.uk/changes/changescip/index.html

and it looks like my assessment was right. They say:

This will result in the ongoing expenses of each investment trusts reducing.

No mention in the link about the annual fee being £40 as per one letter I got so I will be in touch with F&C on Monday. Has anyone else got a letter saying £40?

The new charge for lump sums seems particularly harsh. Previously the cost was 0.2% of the sum invested. For the £100 minimum that will now be 8%. Even on a £1000 top up it will still be 4x higher than it was before the charge.