Child Trust Fund

Children born between September 2002 and the start of 2011 were eligible for a Child Trust Fund (CTF), kick-started with a voucher for at least £50 form the government. CTFs were phased out and replaced by the Junior ISA in 2011. Today, the value of many CTFs will be modest – the original voucher value plus any growth or interest – whilst others will be more significant had parents, grandparents or guardians taken the opportunity to top them up.

At the age of 16 children with a CTF can assume some control over their investments – guardianship that lasts until their 18th birthday when, as ‘official owners’, they can decide what to do with the money. September 2020 will be when the first batch of CTFs mature for those reaching 18, and the government hasn’t yet announced what will happen – they may well roll over into an ISA or just sit as cash. 

For any 18-year-old a financial windfall is welcome, and, in most cases, the initial reaction will be to spend, spend, spend. 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 long-term goals over a short-term retail fix.

Frequently Asked Questions

All children living in the UK and born between 1 September 2002 and 4 January 2011 were entitled to a Child Trust Fund.

Any money in your child’s CTF (whether a Government contribution or a contribution from you, family members or friends) belongs to you child and will be locked in until they turn 18. At this point your child can choose what to do with the investments.

The Government is yet to announce the policy regarding the state of the account once the child turns 18. The most likely outcomes are either they automatically roll over into an ISA or they will just sit as cash and require the child to decide whether to leave it, transfer to an ISA or withdraw the money.

The current recommendation states that at maturity if no instructions have been received from the account holder (i.e. the young person) on the future of the investments in the CTF, the account will be transferred to a tax advantaged ‘mature account’ pending further instruction. Any investments in the ‘matured account’ will retain their tax advantaged status, and the terms and conditions which applied within the CTF.

Please note the Government have yet to confirm the maturity procedure this is just the current recommendation so this could change.