Halifax

MonkeyBusiness_3

Hi,

5 years ago we opened a trust fund with the Halifax. We used the £250 from the government because the fund was for our new born child. It's in his name.

If i'm honest i'm not sure if this is the best idea or if i even understand it too much. Share investment etc....

Can you advise if there is a better way of saving for our son?

We pay into this each month and guess plan to until he is 18. I think this money cant be touched by my son until he's 18.

Thanks

bowlhead99

If it is a share based child trust fund it should grow over time with the returns from the stock market and will presumably already be quite a bit more valuable than what you have put in, even after taking inflation into account. It's a good way to put away cash that neither you nor he can withdraw until 18. He builds up a nice little stash and it can remain tax-free once he's old enough (kept in an adult ISA) or taken out and spent. Halifax is one of the options but you could always transfer it to another Child Trust Fund provider if you prefer.

CTFs are not offered to new children any more, the equivalent is a Junior ISA. Because all children being born now can now get Junior ISAs and only a few who were born in the right date range can get CTFs, the CTFs in the market are not always as competitive in terms of annual fees or variety of investment choices, as JISAs.

At the moment you can only transfer a CTF account into another CTF account with a different provider. But from next April, you will be able to transfer it into a JISA. At that point you can look around and see what variety of competing JISA investment products are around and what they all offer, you may be able to find a better deal than the Halifax.

So, doing what you're doing (assuming it is a shares based investment rather than just a cash savings account - there are two types of CTFs) seems a decent way of investing for your son at the moment; and then consider investment JISAs as we get closer to next April. That assumes you are happy with him having access to it at age 18.

If you aren't, consider saving or investing in your own name instead for new contributions, and then you have more flexibility on how much he'll have to blow on his driving lessons or university tuition fees or travel or whatever 18-year olds buy.

MonkeyBusiness_3

That is fantastic. Thank You for being so informative.

Gavin