To ask you for everything you know about Child Trust Funds

[vincentseyes]

Hi there,

Posting in AIBU for traffic mostly.

Bit of backstory - I'm 17, 18 early next year. A year or so ago my parent mentioned that I had a Child Trust Fund though she didn't know how much was in it. I'm just wondering how it works, and how much (on average) money there is in it? (obviously unreasonable to ask anything specific, but there's a big difference between £50 and £5000 for my life, though of course I'd be grateful for either).

I'm also wondering if I need any kind of evidence / information. I'm no longer in contact with either of my parents, will that affect anything and do I need to get any information from them to access the money?
Can I look at any account balances before I turn 18, and will the pandemic have affected any of the money in there? Sorry if a stupid question, I'm just not especially knowledgeable on this area of finances.

Was also wondering if the fact that some of the money would go to a house deposit and if it were the majority of the deposit, would that make me less attractive in relation to getting a mortgage? I'm a full time student but I'm married to someone who works full time, and the house might end up in his name depending on my credit score.

If anyone has any info on CTFs, I'd be very grateful. Thank you!
x

My daughter's just turned 18 (I think she was born about 6 weeks after the CTFs were started). We transferred hers into a Junior ISA a while back. It now turns into an adult ISA and the provider hers is with need her to show photo ID as part of changing its status.

Although ISA returns aren't necessarily great at present unless you are investing in the stockmarket with its increased risks, if you do have a significant pot you might like to see if it can stay in a tax free environment until you definitely need it for something else.

I agree that as you are over 16 you should be able to get all the details of your fund, change the address recorded so all paperwork is sent to you, and indeed move it to another provider / change it to a junior ISA if you so wished.

Good luck tracking it all down.

@HalfSiblingsMadeContact Hi thank you for posting! Do you recommend ISAs in that case? I guess I've got in my head that a deposit makes more sense and gives me a bit more freedom (re; potential kids for example) but I'm interested to know if you think an adult ISA is a good idea.

There seems like a lot of paperwork involved in tracking this all down, bit tricky when lots of branches aren't accepting appointments due to Covid unfortunately! I might hold off and wait to avoid some paperwork and hopefully lockdown will be easing by Jan.

[quote vincentseyes]@VodselForDinner Does marriage entitle me to anything, and can I be a joint owner if I don't work right now / have a good credit score? Or would it worsen our mortgage rates?

I know that it's a riskier position, but we're sinking hundreds of pounds per month into renting[/quote]
@vincentseyes you can still be on the title without a job - DH is and he was SAHD when we bought. But if the mortgage is in both names, you are liable for the repayments, usually on a joint and several basis which means the bank can pursue either or both of you for repayments. In reality if you earn less then you will be less/don't have a credit history then this impacts how banks view you in deciding whether to lend but they also look at your DH. I think (but I may get corrected) that provided he can demonstrate ability to pay that shouldn't affect too negatively. Regardless, if it's your home you should be on the title.

We've never added to our ones. My Dd is 17 and hers is worth about £2500.

@tickly Yeah so DH has been in the job he's in right now (emergency worker, relatively respectable) for about 2 years and he's been in employment prior. But obviously I don't work currently, and I haven't done previously which I'm concerned about in relation to a mortgage - we were considering getting a joint account that he gets paid into and we'd pay out of in an attempt to boost my credit score, but not sure if that would actually work?
Neither of us have credit cards as well, which I don't know if it's a good thing or not.

@ExclamationPerfume Wow! Did you do the stocks one or the cash one? Sorry can't remember their proper names haha

@LEELULUMPKIN

It very much depends on whether your parents invested any extra sums to the account during its life time.

I have just checked my DS's, he is almost 16 and it is currently valued at £1,148.

We have not put any money it to it at all.

Don't know if that is in any way helpful OP? It might give you some idea of the amount to expect.

Do you mind me asking where yours is invested? My dcs funds are only worth about £500 so am thinking of changing things for a better return. Thank you

@vincentseyes good luck with the tracking down of the fund.

Obviously there are plenty of variables in terms of how much might be in yours but to give you an idea of how much a regular saving might have accumulated - my DS received the initial £250 starter sum and we have since paid in £50 every month, plus random lump sums of birthday money / gifts from grandparents etc from time to time. He turned 16 this year. His is an investment trust based fund (so it does fluctuate with the market) but the most recent statement puts the total amount at just over £22.5k.

So it is entirely possible that if your mother has been putting a regular monthly amount into your fund, it could now be around that £20k mark - but obviously that's very much an 'if' and will depend on what kind of fund she opted for originally, how much she has been investing each year and so on.

I hope you manage to sort access without too much hassle.

You can't open new CTF so it would be a Junior ISA that you could transfer to now

Hi @FlyingPandas! Thank you, it's good to know that £10-20k is on the cards (though I'm trying not to have any specific expectations). If you don't mind me asking does your son know about the CTF, and does he have any plans of what to do with the money? What would you advise him to do? I'm trying to be responsible but it's trickier to facilitate than at first glance haha!

@ExclamationPerfume

We've never added to our ones. My Dd is 17 and hers is worth about £2500.

Wow! where is yours invested please?

Just to say, my eldest is approaching 16, so we got an extra statement this year as they ask if we went her to take control of it from her 16th birthday.
I pay a set amount in to the account every month and have done since it was opened. Since March this year, it has depreciated by about 20%

You would be absolutely mental to put down a deposit for a property you will not own. Don't do that.

@DumplingsAndStew Ah shit, sorry to hear that! Do you have the stocks type of CTF, and is that in relation to the pandemic do you think? When you say depreciated do you mean it's lower than the original government sum, or it's 20% lower than your statement from the previous year?

@MustardMitt Even if I got the joint tenant / tenants in common thing and we're married?

@ExclamationPerfume

We've never added to our ones. My Dd is 17 and hers is worth about £2500.

Wow! My son is 17 in February and his is "only" worth £480! Amazing how different all the monies are

@vincentseyes yes, DS knows about the trust fund and tends to ask me to put most of his birthday and Christmas money into it now as he likes the idea of saving.

We will encourage him to put the majority (if not all) into an ISA or similar when he turns 18, and continue to save it for the time being, I don't think he has any specific plans for it at the moment but obviously that may change! He is in a very different situation to you though and quite young for his age in many ways - you sound very mature and responsible.

Depending on how much is in your fund when you finally get access to it, it might be worth your seeking advice from an independent financial advisor to see what they would suggest.

@FlyingPandas Great he's keen on saving! I wish I had saved more before moving out, but I moved out quite suddenly and now it's a bit trickier to save as much - massively helps in the long run though and keeps the blood pressure down

I'll have a look at independent financial advisors and also maybe have a trawl through the money forum on here for some ideas. Getting on the housing ladder is a priority as it seems to be getting more challenging with time, but it might be good to wait for a few more years and try and gain some more interest (however much the amount actually comes out to be!)

OP, can I just say that you sound like a lovely and mature young lady. You may not know much about finances but you are making an effort to learn. Frankly, what person who is 18 years or younger knows about mortgages, CTFs or JISAs. There are grown ups who are clueless, my dh included.

You write very well and none of the txtspk of teenagers of my ds and dd's age. If you weren't estranged, your mother ought to be proud of you. You will do just fine.

Thank you so much, @blueshoes that's so lovely of you to say! I really appreciate it, and I'm genuinely grateful that I can come here and seek out some advice on topics that I'd otherwise go to family for (if I were in the position to). I'm quite scared of all the options but I'm grateful to hear the positives and negatives that I may otherwise not have thought of.

Thank you!

just checked daughters -paying in £20 per month , is currently about £3100 having dropped £800 since April, hopefully recovers , but not really a good investment making £200 in 10 years

@changed4good Yeah that's not great - I guess it's better than nothing but you always hope for more. Does it look like it's going back up at all?

You can access at 18 & only you can have the money.

I get yearly statement for mine.

Pre covid they had around £4500 as I put some extra in as does Mum. They dropped about £1700 when lockdown happened.

It could be worth finding out about leaving it in there to wait and see if they might go back up in value?

Just ask your Mum - she might be ok about telling you.

littledrummergirl Okay so there is a risk of it decreasing? Did you go for the stock market CTF in that case?

No, we banked with barclays at the time so opened an account with them.
I've never expected her to receive anything from it so we pretty much forget about it. We have 2 older dc though who didn't get this so just ignored the trust fund and saved for all 3.

@converseandjeans Hmmm, yeah I'm worried about a Covid-related drop but might always have gone up by Jan? Fingers crossed.

I can't ask my mum unfortunately, we aren't in contact!