Allocated CTF Accounts - Your Questions Answered
How do I become a Registered Contact?
What are the Government standards for a stakeholder CTF account?
Is a stakeholder account right for my child?
What is lifestyling?
Does my child’s Plan have to be lifestyled?
Who can contribute to the Plan?
How can subscriptions be paid?
Can monthly subscriptions be reduced or stopped?
Can money be withdrawn from the Plan?
Where are payments invested?
How can I keep track of the value of the Plan?
Is there a death benefit?
What are the tax advantages?
Can Child Trust Fund accounts be transferred?
What are the charges?
How do I become the Registered Contact?
You can download the Registered Contact Application and return it to us at Customer Services, Foresters, Foresters House, Cromwell Avenue, Bromley, Kent BR2 9BF. Alternatively you can phone our CTF Team on 0800 990 022.
Until a Registered Contact is appointed we will send any correspondence about this Plan to the name and address supplied to us by HM Revenue & Customs.
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What are the Government standards for a stakeholder CTF account?
Stakeholder standards for CTF accounts include minimum subscriptions from £10, a range of payment methods and total charges of no more than 1.5% of the account’s value each year.
Scheme investments must be suitable and take into account the need for diversification with lifestyling to progressively reduce the investment volatility by switching to less risky assets as the child nears age 18.
Accounts that need stakeholder conditions are not necessarily suitable investments for a customer, nor do they offer any guarantee of performance.
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Is a stakeholder account right for my child?
CTF Accounts can be stakeholder or non-stakeholder but only one type can be held at any time. Your child’s Plan has been allocated by HM Revenue & Customs to a stakeholder account as this is the Government’s preferred way of saving.
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What is lifestyling?
In later years we will progressively redirect subscriptions and switch units in your child’s Plan to a lower risk fund, which is invested in gilts and other fixed interest securities. This is known as lifestyling. The aim is to gradually reduce exposure to shares and help shelter the Plan from stock market swings as it approaches maturity.
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Does my child’s Plan have to be lifestyled?
No. We will inform the Registered Contact when lifestyling is due to commence which will normally be from your child’s 13th birthday.
At that time the options are for the Plan to be lifestyled or, alternatively, to continue to be fully invested within the Stakeholder Managed Fund 1.
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Who can contribute to the Plan?
To give your child a real financial head start you should supplement the Government contributions to this Plan. Friends, family and anyone else can also make payments. All subscriptions are gifts to the child and cannot be reclaimed by the donor.
Subscriptions are accepted in date order up to the maximum limit of £1200 each subscription year. The first subscription year runs from the date the Plan is opened until your child’s next birthday. Thereafter, each subscription year runs from one birthday to the next.
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How can subscriptions be paid?
Regular subscriptions are collected monthly by direct debit or standing order from each subscriber. The minimum regular subscription is £10 (£5 for increases) and, each year, we automatically increase the amounts received from each monthly subscriber to help the Plan keep pace with inflation.
Single subscriptions can be made by cheque or direct credit. The minimum is £10.
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Can monthly subscriptions be reduced or stopped?
Yes. Any monthly subscriber can stop paying or reduce their monthly subscriptions at any time. Reductions are subject to a minimum of £5 and a minimum ongoing subscription of £10.
If any subscriber wishes to stop automatic increases to their subscriptions they should tell us at least 14 days before the increase is due.
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Can money be withdrawn from the Plan?
No. All savings are locked in until your child’s 18th birthday. At that age the accumulated fund will be payable to your child as a cash lump sum to start their adult life or it could be used for reinvestment.
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Where are payments invested?
All payments to your child’s plan are initially invested in the Forester Life Stakeholder Managed Fund 1. The Fund aims to achieve medium to long-term growth through a conservative selection of investments consisting of fixed interest and index-linked securities (stocks) as well as shares. The stocks provide the Fund with stability whilst the shares provide the opportunity for growth.
This is a unit-linked investment fund which is divided into a large number of units of equal value. Every payment and those of other contributors, buys a number of these units. The value of each unit depends on the value of the underlying investments that make up the Fund which is valued each business day.
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How can I keep track of the value of the Plan?
The value can be determined at any time by multiplying the number of units in the Plan by the unit price at that time.
You can view current unit prices on our website or by telephoning our Unit Price Information Line on 0800 990011.
In addition, we will send an annual statement within one month following your child’s birthday to the Registered Contact. This shows the payments received and the Plan value.
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Is there a death benefit?
Yes. In the event that your child dies before age 18 we will pay out 101% of the value of units to the child’s legal personal representatives.
In exceptional circumstances payment may also be made in the event of your child suffering a terminal illness.
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What are the tax advantages?
All payments build up in your child's Plan without personal liability to any Capital Gains Tax or Income Tax. There is no personal tax to pay by you or your child.
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Can Child Trust Fund accounts be transferred?
Yes, the CTF rules allow accounts to be switched between providers free of charge. Details are set out in the Terms and Conditions, which will be sent to the Registered Contact for the Plan.
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What are the charges?
Foresters Child Trust Fund is a stakeholder account and as such meets the standard for ‘capped charges.’
There is an annual charge of 1.5% of the value of the funds accumulated. If the fund is valued at £250 throughout the year, this means that we deduct £3.75 that year. If the fund is valued at £500 throughout the year, this means that we deduct £7.50 that year.
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