Child Trust Fund explained
What is the Child Trust Fund (CTF)?
The Child Trust Fund was a Government savings and investment initiative aimed at giving your child a better financial start. If you invested in The Co-operative Investments' Child Trust Fund, in association with The Children's Mutual before 31st July 2010, your child's account will continue to run until their 18th birthday.
How can my child get the best from their Child Trust Fund?
If you invested just the Government's contributions, your child could receive a useful sum on their 18th birthday – but not enough to make a real difference. The good news is that your child's Child Trust Fund could pay out a great deal more. You, your family and friends can make additional contributions which can help the account grow into a really meaningful amount. The minimum amount you can contribute is £10 but together you can top up your child's ethical Child Trust Fund by adding up to £1,200 a year. If you paid in the maximum amount every year this could mean a final payout of £37,100 or more – a sum that could really make sure your child gets that flying start. Take a look at the table below:
| Amount paid in each month | Total amount paid* (including £250 voucher and £250 at age 7) | Possible value of Baby Bond® stakeholder account in 18 years' time | ||
|---|---|---|---|---|
| Based on 5% growth each year | Based on 7% growth each year | Based on 9% growth each year | ||
| £0 | £500 | £821 | £1,090 | £1,440 |
| £10 | £2,660 | £3,790 | £4,690 | £5,840 |
| £25 | £5,900 | £8,260 | £10,100 | £12,400 |
| £50 | £11,300 | £15,700 | £19,100 | £23,400 |
| £100 | £22,100 | £30,500 | £37,100 | £45,400 |
We've used 18 years as our example period because the money is locked in until your child's 18th birthday. These figures assume growth of 5%, 7% and 9% each year and total charges of 1.5% of the account's value each year. They are only examples and are, therefore, not guaranteed. Clearly, your child could get back more or less than this. Do not forget that inflation would reduce what you could buy in the future.
* Please note: The projection table above includes an assumed government payment of £250 at age 7. As from 1st August 2010 these payments will no longer be made, the amounts shown for what the child could get back at age 18 are therefore overstated, and possible payouts based on the remaining assumptions are likely to be lower.
Questions?
Phone The Children's Mutual on 0845 600 1953. They are open from Monday to Friday 8am to 8pm and Saturday 9am to 1pm.
The Children's Mutual is authorised and regulated by the Financial Services Authority.
