Child Trust Fund matures in November - Looking at Options 19 August 2022 at 2:52PM in ISAs & tax-free savings 3 replies 88 views

DoctorClifford

My daughter is fortunate to have a CTF maturing in November at around 105,000.
We are looking for a long-term tax-free option that will allow full withdrawal without significant penalty.
There's a 50/50 chance she gets on the Property Ladder whilst studying at University.
Would welcome thoughts on growth options with an 'easy out'.
DrC

eskbanker

https://www.moneysavingexpert.com/team-blog/2020/08/how-to-find-your-child-trust-fund--and-what-to-do-with-it-/ sums up the options - there will inevitably be compromises to be made between growth, value preservation and easy penalty-free access, so it's not going to be viable to find something that ticks all those boxes....

jimjames

Rather shocking and hugely misleading statement about investing in that link from MSE namely "It's risky. Put bluntly, you could lose everything." While this is true for an individual share it isn't the case with a balanced fund. I'm assuming to have reached such a level it is already invested - is that the case?

Something not mentioned there is conversion to a junior ISA. If that is done it could then continue as a full adult ISA without losing any of the tax benefits.

Edit - just seen you can transfer as CTF to full ISA anyway so no need to convert it first.
https://www.youinvest.co.uk/transfer-matured-child-trust-fund-isa

eskbanker

jimjames said:

Rather shocking and hugely misleading statement about investing in that link from MSE namely "It's risky. Put bluntly, you could lose everything."

It's technically true but yes, agreed, an unhelpful slant, although to be fair they do link to their beginners' guide to investment for more detail.  That comment is presumably aimed more at those who've been in cash CTFs, since, as you imply, if they've been invested already then the same principles apply.

jimjames said:

Something not mentioned there is conversion to a junior ISA. If that is done it could then continue as a full adult ISA without losing any of the tax benefits.

Edit - just seen you can transfer as CTF to full ISA anyway so no need to convert it first.
https://www.youinvest.co.uk/transfer-matured-child-trust-fund-isa

Again to be fair, it's a piece specifically aimed at what to do with a CTF that's maturing, so the JISA route isn't directly relevant at that stage - they do link to their other pieces about CTFs and JISAs that cover that ground, and do also highlight the conversion of CTFs directly to full ISAs at the foot of the article.