Child Trust Fund - Your questions answered
Will my child be eligible?
How is the Plan opened?
How can subscriptions be paid?
Can monthly subscriptions be increased?
Can monthly subscriptions be reduced or stopped?
How will I keep track of the value of the Plan?
Can money be withdrawn from the Plan?
Is there a death benefit?
What are the charges?
How do stakeholder accounts differ?
What is the tax situation on the CTF account?
Does my child’s Plan have to be lifestyled?
Can Child Trust Fund Accounts be transferred?
Will my child be eligible?
Child Trust Fund packs, including the Government voucher, are automatically sent to all people claiming child benefit for children that qualify.
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How is the Plan opened?
The Plan has to be opened with the Government voucher by someone with parental responsibility for the child.
Normally this will be a parent who will then be responsible for managing the Plan until the child reaches age 16.
You can Download an Application Form to open a CTF account.
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How can subscriptions be paid?
Single subscriptions can be made by cheque or direct credit.
Regular subscriptions are collected monthly by direct debit or standing order from each subscriber. The minimum subscription is £10.
Subscriptions will be accepted in date order up to the maximum subscription limit.
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Can monthly subscriptions be increased?
Each year we will automatically increase the amounts received from each monthly subscriber to help the Plan keep pace with inflation.
Additional monthly increases from £5 upwards can be made at any time subject to the subscription limit.
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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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How will I keep track of the value of the Plan?
Every year we will send you a statement showing the payments received, the number of units held and the value of your child's Plan.
You can view current unit prices on our website or by calling our Unit Price Information Line free on 0800 990 011.
You should monitor the value of the plan and the level of subscriptions paid.
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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 as a cash lump to your child allowing them to spend or reinvest it as they wish.
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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 charges?
Foresters Child Trust Fund is a stakeholder account and as such meets the Government standard for ‘capped’ charges.
There is an annual charge of 1.5% of the value of the funds you accumulate.
If your fund is valued at £250 throughout the year, this means that we deduct £3.75 that year.
If your fund is valued at £500 throughout the year, this means that we deduct £7.50 that year.
There are no initial or exit charges.
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How do stakeholder accounts differ?
Child Trust Funds can be stakeholder or non-stakeholder but only one type can be held at any time.
Stakeholder accounts must satisfy Government standards for minimum subscriptions from £10, a range of payment methods and charges of no more than 1.5% p.a of fund.
Scheme investments must be suitable and take into account the need for diversification with lifestyling to progressively reduce the investment risk as the Plan approaches maturity.
Accounts that meet stakeholder conditions are not necessarily suitable investments for a customer, nor do they offer any guarantee of performance.
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What is the the tax situation on the CTF account?
Growth within the account is completely free of income and capital gains tax, except for dividents from UK shares.
At age 18 the proceeds are payable to your child as a tax free lump sum.
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Does my child’s Plan have to be lifestyled?
No. We will write to tell you when lifestyling is due to commence which will normally be from your child’s 13th birthday.
At that time your options are for the Plan to be lifestyled or to continue to be fully invested in the Stakeholder Managed Fund.
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Can Child Trust Fund Accounts be transferred?
Yes, the Child Trust Fund rules allow you to switch between providers free of charge.
For more information about how to transfer, please speak to your local adviser or contact our Customer Services Team on 08457 990011.
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