Big fall in Child trust fund

[Orangeblossom78]

Since last year. It was valued at 11K at same time last year and was told would be around 15K when they turned 18 (DS is 15, birthday hence the statement)

It now says valued at 8.5, so has gone down 2.5K since last year.

Is this due to the current situation, any others the same and will it be like to improve?

I am new to this, but it says Stakeholder: Fund name: Royal London UK FTSE4Good Tracker Trust

My son's (age 15) Child trust fund currently is down similar %. (around 22% down since same time last year) i haven't made any payments in that time. Drop due to fall in stock market. Likely to improve over time, but maybe longer than the 3 years till they turn 18. The £15k you were told (by who? on the statement?) would be based on lots of assumptions such as annual rate of growth. There will also be a rider that the value of investments can fall as well as rise. you are never guaranteed what you put in , or how much it will rise. That is the nature of stock and shares investments

I have had similar falls in my own stock and shares portfolio.

My pension is screwed, too. I dare not open the statements for next 2 yrs, tbh.

@ragged. Me too, trouble is end of year statements will be dropping through the door soon.....

I checked ds’s ctf a few days ago and his has gone down too, can’t remember exact figures but from about £800 to £650 in a year.

Any investment would be in the same boat. The child trust fund is only the vehicle. The same investments in an ISA would have suffered exactly the same fate. I haven't looked at my pension pot. It will be far too depressing.

My endowment matures in a few weeks! We are all in this situation, be grateful hes 15

Yes quite. A bonus at 18 not quite being what you were expecting is a world away from the pension you worked for all your life suddenly reducing 25%. I really feel for anyone who was hoping to retire in the next few years.

A friend of mine lost his mum in January. She left an estate valued at £1m to be shared between him and his brother. She’d had it invested for decades. It’s now dropped in value to around £400k. By the time probate is finished and they’ve paid the 40% tax on what it was worth when she died, i.e. around £400k, they’ll get nothing. She’d be absolutely devastated to think that that money she’d looked after so carefully for them was gone. My friend is pretty gutted too, he’s now lost his job and that money would have been their lifeline.

My endowment matures in a few weeks!

Okie, ours too. Pretty worried about that to be honest. Hope it goes OK.

Ours is due to pay off the mortgage...

Endowments are the only area that will actually matter in this scenario.

Pension - sit tight
CTF - sit tight

By the time probate is finished and they’ve paid the 40% tax on what it was worth when she died

They don’t need to HMRC allow a revaluation

I also think people should take this as a way of educating themselves. Unless you’re retiring NOW, this is irrelevant.

As I said in a previous post, my pension investments are down by over 40% in the space of a week. None are with risky companies and all are "managed" funds with a lot of oversight. Will they ever recover to previous levels in a timescale to minimise the loss? Doubt it....

40% sounds a lot. Managed funds I have seen are down between 10-20% over last 6 weeks or so. I haven’t seen any down that much other than specialist funds.

Assuming all will be. I must check ds's ctf.

40% - seems extreme

Are endowments at risk? Ours matures very soon too :(

Is this due to the current situation - yes
Any others the same - yes
will it be like to improve - let's hope so

The market has suffered massive losses, although things have picked up in recent weeks. You have 3 yrs til 18 so time to (hopefully) make back the losses. Maybe check out other funds in the meantime, to make sure the Royal London one you are in fulfils all of your investment objectives.

I am unsure if endowments are at risk. We have had a letter since this telling us it is still on track. At Christmas had a letter saying it already covered the amount needed. I'm hoping at least it covers it, if not giving any extra.

Well ‘at risk’ depends what you mean and also depends on what type they are. The issue is that investments turning to cash when markets are low means you can get less back - with profits may not be so bad but terminal bonus will usually be impacted.

This is the fatal flaw of endowments. If you HAVE gone cash the option to defer until markets recover is taken from you.

18th birthdays are irrelevant as you don’t HAVE to encash. Convert to a standard ISA and sit tight.

I got my annual pension statement today. Down 5k from last year. Marvellous

I'll have to look tomorrow. We had a letter with the expected value a few weeks ago. I feel rather sick :(

I may be nuts but when the markets crashed I stuck a lump sum in both DDS CTF accounts thinking they will get more shares for the money that was otherwise sitting in a savings account earning nothing

I may be nuts but when the markets crashed I stuck a lump sum in both DDS CTF accounts thinking they will get more shares for the money that was otherwise sitting in a savings account earning nothing

Good move.

Just sit tight, don’t look, don’t panic. If you’re retiring in the next 5 years, take advice.