MSE News: Blow for 60,000 F&C child trust fund holders

DetailsMatter

MSE has obviously gone down hill ...

The government set a 1.5% fees cap on CTF's to which ALL providers wishing to offer CTF's had to agree to. It is obvious that this move by F&C breeches this cap. Therefore by applying their proposed charge of £30 to accounts with balances £2,000 or less they are breaking the law. Additionally, the accounts already have fee's deducted through the individual fund charges, so in fact the balance at which this charge becomes illegal is slightly higher than £2,000 and dependent upon the particular mix of funds held.


Furthermore, there is nothing in the government issued materials (both to the public and those issued by HMRC to prospective CTF providers) that says that CTF Providers can change their fee structure to existing account holders and neither is there any mention of this in the forms provided by F&C. Hence it would seem that F&C are directly challenging the UK government on this.


Why aren't MSE & Martin Lewis on the radio etc. pointing out these key facts?

dunstonh

The government set a 1.5% fees cap on CTF's to which ALL providers wishing to offer CTF's had to agree to.

No it didnt. Only if they wanted to call themselves stakeholder CTFs did they have the cap.

It is obvious that this move by F&C breeches this cap.

Only if F&C call them stakeholder.

each_peach_pear_plum

So, if I have read this correctly, as my son has a CTF Stakeholder account, we will not be affected by the new charges....?

We only have the free £250 in there anyway, but wanted to check.

cavabubbles

Yes - if it's the stakeholder CTF which has the All Share Tracker fund it will not have the £30 charge. I checked my daughters CTF with F&C and luckily she has this fund.

F&C sent me a letter last Saturday and couldn't see any mention of a new £30 charge and it seems that if it's the stakeholder account it will not be affected.

NB54

There is a new HM Government e-petition to allow CTFs to be transferred to Junior ISAs - epetitions.direct.gov.uk/petitions/45469 (sorry, as a fresher I can't use hyperlinks) - this needs as many signatures as possible, especially with the budget coming up in less than a month.

swanny65

Thanks MSE and contributors for the information posted on this subject

I have two F&C CTF's which I have paid £25.00 into each from the outset. They are each spread over 6 different funds and now valued at £3900.00 (10 year old child) and £3600.00 (9 year old child) approximately. Not the best return but they have increased in value.

While not happy at this imposed £30.00 fee. It would appear the effect on my investments will be less than 1% and probably not worth my while transferring elsewhere.

To me it looks like F&C want to get rid of those parents that have not topped up their initial investment.

I cant see how I will get a better deal elsewhere so, while hacked off with the charge, I will probably stay put and look to move to a junior ISA if the Government decided to allow CTF transfers to Junior ISA's

happyhero

So is there no general consensus as to what else to transfer to within the confines of the CTF if you have just the basic amount invested?

I invested my sons in the shares side of things in 2006 and it is worth about £336 now. Times have been a little tough for us so whilst we would have liked to add to it, we couldn't.

I had thought that a lot of people would be feeling badly treated and would have been moving their investment on principle if nothing else and also in time to avoid the £30 charge on 6th April thus making the investment £30 better off than it will be next month straight away or at least help towards any transfer fees rather than give it to the annoying F&C.

I feel like that and would rather move it into something more risky and take our chances then let F&C take £30 of my boys small investment every year.

If you have a lot more invested then I agree annoying as it is I would probably be tempted to leave it where it is considering the charge percentage wise against the investment but I would have thought the majority of people would have taken any free money like this and never added to it, probably because they could not afford it, thus creating a huge group of people with just the original investment plus any growth not knowing what to do.

jimjames

If you move to the stakeholder CTF with F&C then you will not have to pay the £30 admin fee.

happyhero

jimjames wrote: »

If you move to the stakeholder CTF with F&C then you will not have to pay the £30 admin fee.

What rate has it grown by on the Stakeholder account over the last 2 or 3 years?

Also how do you transfer from shares to stakeholder within F&C, I've tried to find it on their site but I cannot seem to find the right page and many come up as page not found when you click on their own links, as if they don't want you to find it, or am I being paranoid, or maybe I am just in the wrong place?

neet

F&C reply is verbose (presumably equating length to diligence and rigour) It basically says this is fair because in the trust others are paying the bill, (I am very happy for F&C who take the fees to pay the alleged bill) it applies to everyone (if something unfair is done to everyone it becomes fair) and they couldn't possibly know at the outset that lots of people might take up the CTF nor that some would not keep investing. I cannot believe that 30£ is fair to send one letter a year and buy a block of shares allocated by computer on systems already paid for.

It is I accept quite a complex situation not least following the RER. I think i will respond rejecting their explanation but wonder if others have a thought. Just for the record did anyone have an answer to the question - where to find the form to make a transfer to the stakeholder ctf??? Was it JimmyJames who thought he knew