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?
Alternatively, they can also transfer the account to a savings plan with another provider.
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.
A combination of both
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.
What happens next?
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.
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.
Financing further education
“I was completely happy with the entire process your colleague was very clear. I had no unanswered questions so thank you very much.”