Child Trust Fund - frequently asked questions
What is the Child Trust Fund (CTF)?
Who can open a Child Trust Fund account?
How do I get my child's payment from the Government?
What is lifestyling?
What do I need to do with the Child Trust Fund voucher?
Who are The Childrens Mutual?
How much is the initial payment?
How do I apply through Lloyds TSB for a Baby Bond® Stakeholder Child Trust Fund account for my child?
Will there be further payments from the Government into the account after the first one?
Can I pay more money into my child's Child Trust Fund once it's opened?
How much can my child expect to have in their account when they reach the age of 18?
Can I make withdrawals from my child's Child Trust Fund?
At what age can my child withdraw money from their Child Trust Fund account?
What if I don't want the money to go into a Child Trust Fund?
What happens if I don't use the Child Trust Fund voucher within 12 months?
What is Child Trust Fund (CTF)?
The CTF or Child Trust Fund is a new Government scheme to ensure that all eligible children have the chance to build up savings throughout their childhood by giving them an initial payment with which to open a savings account.
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Who can open a Child Trust Fund account?
You can open a Child Trust Fund for each of your children born on or after 1 September 2002, as long as you have been awarded Child Benefit for them.
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How do I get my child’s payment from the Government?
The Government will issue a Child Trust Fund (CTF) voucher for each eligible child. The voucher will be sent automatically to the person claiming Child Benefit for the child. The Government will begin issuing CTF vouchers from January 2005. You will be able to open a CTF account once you receive your voucher.
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What is lifestyling?
This means switching from stocks and shares to a ‘less risky’ environment, such as Government bonds, fixed interest securities and cash deposits. That way we can aim to limit the chance of your child’s savings losing value as their 18th birthday approaches.
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What do I need to do with the Child Trust Fund voucher?
As soon as you receive your child's voucher you can open your child's Child Trust Fund (CTF) account with a provider of your choice, such as The Children’s Mutual through Lloyds TSB.
You have 12 months from the receipt of the voucher to open a CTF account. If you have not chosen your provider at that point the Government will open a Stakeholder CTF account for you and tell you which provider it is with.
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Who are The Children’s Mutual?
At Lloyds TSB we recognise the importance of saving for your child’s future.
That’s why we have teamed up with The Children’s Mutual, who are specialists in savings for children. With over 50 years’ experience in helping people save for their children, they are well placed to ensure that your child’s Child Trust Fund account is well managed.
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How much is the initial payment?
The minimum payment for eligible children is £250. That payment will be topped up to £500 for families earning less than £13,480 a year.
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How do I apply through Lloyds TSB for a Baby Bond® Stakeholder Child Trust Fund account for my child?
You can apply to open an account online. To do this go to www.lloydstsb.com/childtrustfund and follow the instructions.
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Will there be further payments from the Government after the first one?
An additional sum may be paid into the account by the Government when the child reaches 7. This is yet to be finalised.
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Can I pay more money into my child’s Child Trust Fund account once it’s opened?
Yes. As with some other children’s savings accounts, you, your family and your friends can use it to build up savings for your child’s future. A total of £1,200 a year can be added to your child’s CTF account.
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How much can my child expect to have in their account when they reach the age of 18?
We cannot give an exact figure, but you can see just how much extra contributions, plus the original voucher, could amount to in the illustration below.
| Amount saved each month | Potential value of Baby Bond® Stakeholder in 18 years time |
|---|---|
£25 | £9,761 |
£50 | £18,867 |
£100 | £37,078 |
We’ve picked 18 years because the money is locked in until the child’s 18th birthday. These figures are based on investment growth of 7% each year and total charges of 1.5% of the account’s value each year. They are only examples and not guaranteed. The child could get back more or less than this. Tax rules may be subject to change in the future.
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Can I make withdrawals from my child’s Child Trust Fund account?
No. The account is in your child’s name and your child is the only person authorised to make withdrawals from it – and then only once she or he reaches the age of 18.
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At what age can my child withdraw money from their Child Trust Fund account?
Child Trust Fund account holders can begin to manage the accounts themselves at the age of 16, but can’t actually withdraw money until the age of 18. At this point the Child Trust Fund account will close completely and the funds will be available to your child. There's no restriction on how the money is used, although the idea is that your child could use it for education or training, or to help set up a home or a business.
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What if I don’t want the money to go into a Child Trust Fund account?
The Government’s Child Trust Fund voucher payment can only be used to open a Child Trust Fund account. Since that payment is a tax-free gift that will result in a much larger sum on your child’s 18th birthday.
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What happens if I don't use the Child Trust Fund voucher within 12 months?
The Government will automatically open a stakeholder account with an approved provider after 12 months, and tell you who it is.
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