Child Trust Fund

What to expect as your child approaches their 18th birthday

When your child was born, you made the wise decision to set up a Child Trust Fund that’s close to reaching maturing now they are approaching their 18th birthday. Their account will soon mature and will require them to make an instruction on the account, which could involve them continuing their investment journey or withdrawing the money invested. Below you’ll find details of what will happen to the account on their 18th birthday and the options that are available to them. 

What happens on their 18th birthday?

On the child in your life’s 18th birthday, their Child Trust Fund will turn into a matured CTF account, meaning it will have the same benefits and charges as before, but it will be closed to any new investment. The matured CTF will remain the same as before until they tell us what they want to do with their investment.

We can’t accept new contributions into a matured account (even from you) so any direct debits will stop on, or before, their birthday but the annual charges on the account will remain the same as before (£25+VAT on a shares account or 0.7% of investments for a stakeholder account).  We can help start direct debits up again if they transfer into a new account though.

Your child will receive a letter from us around the date of their 18th birthday asking them to make a decision about their investment. They’ll be directed back to this page, where they’ll find a form which they will need to fill out and send back to us whatever decision they take with the account. Please note this can only be done once they’ve turned 18, but they don’t have to make a decision right away.

We’ve listed the options available to them below, but should you or your child have any questions about the process or the options, you can contact us.

Let’s talk about risk

The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Tax allowances and the benefits of tax-efficient accounts are subject to change and tax treatment depends upon your individual circumstances.

What options are available to my child when they turn 18?

Continue investing

They can transfer into our BMO ISA or BMO GIA. Key information on both of these products can be found in the section below.

Withdraw the investments

They are able to withdraw the money that’s been invested, without paying a fee.

Do nothing

The CTF will continue as a “matured CTF” –  the account will stay in the same funds as it’s currently held in but no new investments can be made.

Continue investing

Continue to invest for life’s big moments, such as further education, house deposit or a rainy day with BMO by moving into one of our savings plans for adults.  Transferring into the BMO Individual Savings Account (ISA) keeps the tax benefits of the Child Trust Fund and they’re still able to invest the full annual ISA subscription allowance on top of the amount transferred.  However, if our ISA isn’t the right choice for them, then we also offer the BMO General Investment Account (GIA). Read more on the BMO ISA and BMO GIA below.

Alternatively, they can also transfer the account to a savings plan with another provider.

BMO ISA

A popular, tax-efficient way to invest. There’s no tax to pay on any income they earn, and they can create an investment portfolio that’s right for them. Invest up to £20,000 this tax year.

  • Tax-efficient investing
  • Invest in the long-term potential of the stock market
  • Access all 10 of our investment trusts
  • Tailor it to suit your needs
  • Flexible investment options

BMO GIA

A great way for long-term investors to benefit from the potential of the stock market. Offers flexible investment options with no annual limit.

  • No investment limit
  • Access all 10 of our investment trusts
  • Growth and income strategies
  • Flexible investment options
  • Tailor it to suit your needs

Withdraw their investments

Another option they have from their 18th birthday is to withdraw the money that’s been invested. There’s no charge to withdraw but they wouldn’t be able to put the money back into a CTF.  If they decide at a later date to put the money into an ISA, it would be treated as a new subscription.

We recognise that to most 18-year-olds a house deposit, wedding costs or – even more outlandishly – a retirement pot are goals that seem a lifetime away. They practically are! Take a step back though and we firmly believe that it’s better to prioritise longer-term goals over a short term retail fix.

Do nothing

Your child may not know what they want to do with their account when you turn 18 or perhaps need more time to decide. Rest assured they don’t have to tell us their decision straight away.  Their CTF will continue as a “matured CTF” –  the account will stay in the same funds as it’s currently held in. They just can’t make any new investments or change the ones they already have.  The fees will continue at the same level as a Child Trust Fund and will be taken from the funds in the account and will depreciate the overall value of their holdings.

Between now and their 18th birthday, they should have a think about what they want to do with the money invested. As a parent or guardian, you could play an important role in their decision making process so it would be beneficial to discuss their options with them.

Whilst we can’t accept an instruction about the future of their investment until they’ve reached 18, there are a couple of things that they can do now.

Firstly, download the CTF maturity form, which is designed for your child to fill in so that we can keep in touch with them regarding the account and also to provide details of anyone they’d like to help with the account once they’ve turn 18, should you wish. It’s important we have their correct contact details in order to update them with any actions they may need to take regardless of which option they decide to choose. 

They’ll also need to prove their identity and where they live in order to make an instruction on your account. This is an important step to make sure that we know who they are and that only they have access to the funds that have been built up. It’s important to provide this as soon as possible as without proper verification we can’t accept any instruction, whether that be a further investment or withdrawing money from the account. We’ve provided some more information on this below.

In accordance with UK anti-money laundering regulations, financial firms are required to verify the identity of anyone connected with an account. We need to see certified copies of two documents which confirm your identity, one from each of the lists found further down. These also state who can certify your documents.

Certified means that the person who copies your original document needs to confirm that they have seen the original document(s).    

To certify a document, the certifier takes a copy of the document.

On each page they need to include

  • The statement (it can be stamped or handwritten) “I hereby certify this is a true copy of the original”
  • The date (the certification must be within the last 6 months)
  • Their signature
  • If the copy of your photographic identification (e.g. passport) is not clear, they should also state that it is a good likeness of you.

They also need to provide their full name and designation (e.g. job title), badge/reference/registration number if applicable and clearly note their full address details and telephone number. This is because we need to be able to separately confirm their identity e.g. through a professional register.  

To verify your identity, we can accept

  • Valid passport
  • Valid photocard driving licence (full or provisional)
  • Recent evidence of entitlement to a state or local authority-funded educational or other grant
  • Most recent HM Revenue and Customs Tax Coding Notification, Assessment or Statement (dated within the last year). If you are working and paying tax, the HMRC will send you a copy of your tax coding notification on request.
  • A government-issued document that incorporates your full name and photograph and either your residential address or your date of birth.

We then need something that has been sent in the post to your residential address.   

  • A bank or debit card statement which has been issued within the last three months (but not ones printed off the internet). If you don’t normally get these sent in the post, if you contact your bank, they can usually send you a one-off statement.
  • Utility bill issued within the past three months (but not ones printed off the internet)
  • Valid photocard driving licence (full or provisional)*
  • Recent evidence of entitlement to a state or local authority-funded educational or other grant*
  • Most recent HM Revenue and Customs Tax Coding Notification, Assessment or Statement (dated within the last year)*
  • A government-issued document that incorporates your full name and photograph and either your residential address or your date of birth*

* We need two documents so you can’t use the same document to confirm both your identity and your address.

To verify your bank details, we need something from your bank which has your sort code, account number and account name printed on it e.g.

  • A bank statement which has been issued within the last three months (but not ones printed off the internet). If you don’t normally get these sent in the post, if you contact your bank, they can usually send you a one-off statement.  We can accept the same statement as both proof of your bank details and proof of your address.
  • A voided cheque (in other words, one that you have scored through and written VOID across it so that nobody could use it)
  • A pre-printed pay-in slip

We don’t recommend that you send us originals of personal documents in the post.  However, you can send us certified copies instead. 

We can only accept documents certified by people with certain professions.   They cannot be someone related to you.  They could be a family friend and they need to be currently practicing (e.g. not retired)

The certifiers we can accept are:

  • A judge or a magistrate
  • A senior civil servant
  • A serving police or customs officer
  • A commissioner for oaths
  • An officer of an embassy, consulate or high commission of the country or territory of issue of documentary evidence of identity
  • A lawyer, notary public or legal executive who is a member of a recognised professional body
  • An actuary who is a member of a recognised professional body
  • An accountant who is a member of a recognised professional body
  • A member of the Institute of Chartered Secretaries and Administrators
  • A director or officer (working within the Legal or Compliance office) of a regulated financial firm
  • The UK Post Office certification service, with details of the individual certifier

The certifier should sign and date each document, and state on each document

  • Their name, address and telephone number
  • The capacity in which they are certifying the documents
  • Their firm if applicable
  • Their badge/reference/registration number if possible

The account will remain open and any funds already received will remain invested. You can transfer to another account within BMO.  However, you cannot add further payments to or withdraw funds out of the account (including transferring to another provider).  Online access to your account may also be restricted.

If we don’t have proof of your bank details, then if you make a withdrawal, we send the proceeds to you by cheque to your registered address.

Why choose BMO?

Benefit from our expertise

Our experienced fund managers make informed investment decisions for you. We invest in a range of equities, bonds, property and private equity and have been helping customers since 1817 and manage over 145,000 UK accounts.

Investment trust options

Whether you’re looking for growth or income, create an investment portfolio that meets your needs, with our 10 Investment Trusts.

One of the World’s Most Ethical Companies

We’re recognised by the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices, as one of the World’s Most Ethical Companies for the third year in a row in 2019.

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Information in this section of the Website is directed solely at persons who are located in the UK and can be categorised as retail clients. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Please read our full terms and conditions and the relevant Key Information Documents (“KID”) before proceeding further with any investment product referred to on this website. This website is not suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek advice before proceeding further with such product.

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