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The Child Trust Fund was launched to encourage parents to save for their children's futures but unfortunately, many parents have not yet taken advantage of the scheme.
What is the Child Trust Fund?
It’s a long-term savings and investment account for your child(ren). It was introduced to:
- ensure your child has savings at the age of 18;
- help your child get into the habit of saving;
- teach your child about the benefits of saving; and
- help your child understand personal finance.
How do I know if my child qualifies?
Every child born on or after 1 September 2002 is eligible for the CTF, as long as:
- Child Benefit has been awarded for them;
- they are living in Northern Ireland; and
- they are not subject to immigration controls.
The first set of Child Trust Fund vouchers were issued to parents 1 April 2005.
Did you receive yours?
If you cash in the £250 voucher and add the maximum £100 per month, you could look forward to an investment of up to £35,000 when your child reaches the age of 18. Don’t forget many lone parents may actually qualify to receive £500 for their child (this is dependent upon your income).
What are the Age 7 Payments?
The last budget statement (22 March) saw the Chancellor announce an additional payment of £250 when your child reaches 7 year or £500 if you are on a low income.
What should I do Next?
If you have received a voucher and have not invested it you can get in touch with us to find out about your options and some more sources of help. If you are not sure what to do with it we can explain how the accounts work, direct you to independent financial advice and help you with any forms that need to be filled in.
Where can I invest it?
Most banks and building societies offer Child Trust Fund Accounts. There are three main types of Child Trust Fund Accounts.
- A Stakeholder Account
- A Shares Account (non-stakeholder)
- A Savings Account
Just as there is a whole range of different bank accounts, there is a wide range of Child Trust Fund Accounts. You can contact us for some advice on this or have a look at the websites listed below.
How much can I put into the Account?
You can put in whatever you like but there is a maximum of £1,200 each year. Even small amounts like £5 will help in the long run. Anyone can contribute including Grandparents, your ex-partner, other famility members, friends and in time your child can put money into the account.
Can I take out the money I have put in if I need it?
No. the money in the Child Trust Fund account belongs to your child. Only they can withdraw money from the account. But it cannot be taken out until they turn 18. At 18 they can decide how best to use their money - for education or to help them buy a house, for example.
Will the money in my child's Child Trust Fund affect family benefits or tax credits?
No, if you are eligible for famility benefits or Tax Credits you will continue to receive them and money in a Child Trust Fund account will not affect your benefits.
How is the Child Trust Fund different from the savings I already have for my child?
The main differences are:
- the Government makes a payment for each child, with more for children in lower
income families;
- the Government will add an additional payment when your child turns seven and
are also considering a further payment at secondary school age.
- the Child Trust Fund is a long-term savings and investment account and your
child will not be able to take out the money until they are 18;
- neither you nor your child is taxed on the money earned in the account;
- it will not affect your benefits or Tax Credits;
- a maximum of £1,200 can be saved each year in the account by parents,
famility and friends;
- children will learn about the Child Trust Fund in school.
Where can I get more information?
Gingerbread's Freephone Advice Helpline for Lone Parents
Child Trust Fund : www.childtrustfund.gov.uk
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A PDF version of this information is also available. Download it today by clicking on the image to the left. |
The Advice is FREE; So is the call!
Alternatively, you are welcome to drop into our centres in Belfast and Derry to see us. Our addresses for the drop in service together with times of operation are as follows:
Central Office |
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Western Area Centre |
169 University Street |
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7 Bayview Terrace |
Belfast |
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Derry |
BT7 1HR |
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BT48 7EE |
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If we are unable to see you then we will arrange a mutually convenient time for you to return for an appointment.
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