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Original poster

"Family Investments" CTF - significant loss after a year.

27 replies

SpawnHorcrux · 06/08/2007 11:50

I started a CTF with Family Investments for DS a year ago, and have just received the yearly statement. I've paid in £400, and it shows a loss so far of about £50.

I realise that stakeholder investments may go down as well as up, but I was a little surprised that it has gone down so much!

I phoned them up and they said that the stockmarket had gone down by about 7% (I think), but even by that standard their CTF has performed poorly. He did say that the market is fairly volatile and that it may well go up again in as little as a month or two

Does this sound bad to you? Should I just stick with it?

OP posts:
margoandjerry · 06/08/2007 12:03

That is quite crap both in terms of performance and in terms of explanation. Equities have actually gone up this year, quite dramatically. August last year FTSE was at about 5800 and went up to about 6700 at its peak. They fell in the last two weeks quite a bit - back to 6200 - but this would probably not yet be reflected in your statement.

You're prob not invested in the FTSE but it's just an illustration that he was talking nonsense. What he meant was that the shares THEY have picked have performed badly so it's a problem with their stock selection, not equities in general.

Having said that, you should just stick with it because stocks do fluctuate and there's no point chasing £50...You've got 16 years or so to catch up.

Original poster
SpawnHorcrux · 06/08/2007 13:22

margoandjerry - thank you How do you know these things? [impressed] I really wish I was more clued up about this stuff.

OP posts:
ruddynorah · 06/08/2007 13:27

the whole point is that it's an 18 year investment. during that time it will go up and down. you have to decide if you are prepared to ride out the peaks and troughs, or ditch it and go with a cash account, but then have no chance of high returns.

Flibbertyjibbet · 06/08/2007 13:35

When I was researching the best place to put DS1's ctf, most of the leaflets I got from various providers said that in any 18 year period, the stock exchange always out performs savings accounts. As you can't touch the money anyway till they are 16 (in a stakeholder you get an option later on to transfer it to a savings account for the last couple of years) you have no option but to stick with it, BUT you don't have to put any more money in while you are not happy with it. You could put any extra funds into a childrens savings account with high interest.
I got a stakeholder for ds1 and savings type for ds2 and as there is a short age gap between them we will split the proceeds of both accounts between them. I decided the vouchers are free money, if the ctf accounts do well then yippee, if not then I haven't lost anything.

Desiderata · 06/08/2007 13:39

I'm with Family Investments. Last year I got a return of 10.6%. The next statement is due in November, so it'll be interesting to see how it's performed this year.

Based on that information, I would strongly advise that you stick with it.

ruddynorah · 06/08/2007 13:40

you can move to another account.

NotADragonOfSoup · 06/08/2007 13:40

Were there any initial charges that have been taken out of the amount you started it with? This can appear to affect performance in the first year.

margoandjerry · 06/08/2007 13:43

I work for an investment company!

Actually I don't know half as much as I should. I dillydallied so long with my CTF and finally decided to invest it in an emerging markets fund - the week before it crashed!

ebenezer · 06/08/2007 15:21

I started one of these a number of years ago now, and was quite shocked when I got a recent statement to realise that it hasn't performed as well as I'd hoped. But then as ruddynorah says, the whole idea is that its a long term investment with peaks and troughs so I guess I'll stick with it now.

HappyMummyOfOne · 06/08/2007 19:56

Have no idea who mines with, the Government banked it as i thought it was a gimic and didnt intend to use it.

I just use a regular childs bank account and save regularly there for DS, may not make a fortune but at least it does gain interest every month and doesnt do down.

Kewcumber · 06/08/2007 20:07

I can't beleive that you wouldhave wlaked away from £500 just you thought I might be a gimick

If you are worried about stock-markert fluctuations then you should go for a fund which starts transferring into cash in stages in the run up to 18. Anyway if youthought it was a gimic why not risk it on the stock-market in the hopes that your DC will make 2 or 3 times that amount by 18. WHat have you got to lose - you started wiht mothing!

Kewcumber · 06/08/2007 20:08

grief there were so many typos in that I wouldn;t know where to start...

HappyMummyOfOne · 06/08/2007 20:27

Wasnt £500 but £250 and it is invested somewhere so i didnt technically walk away - i just didnt choose to use it myself based on my principals.

The government say its a start to saving for uni etc, they wouldnt have to save to pay for uni if the government didnt charge tuition fees.

DS didnt miss out in the slightest as we have saved a set amount for him since he was born.

ChasingSquirrels · 06/08/2007 20:31

Flibbertjibbert - the only problem with that is it is THEIR money, not yours to split between them, and your ds1 could well just take his money and say tough!

Kewcumber · 06/08/2007 21:03

it will be £500 after second payment.
My walking away comment was based on you saying you "didn't intend to use it".

It doesn;t have to be used for University - it could be deposit on a house or even flat rental to help your DC's set up on their own.

Kewcumber · 06/08/2007 21:05

and flippyperty thingie you can chose to move your funds so for example you could choose to move from a share based fund to a savings based fund at any point.

Flibbertyjibbet · 07/08/2007 10:36

well there won't be much in it if ds1 wants to rush off and blow the CTF portion that is in his name - as I am only tying up the free govt vouchers for the full time - ok you may be able to move it but you can't get at the cash till they are 18. Long time to tie up money, so we have more accesible mix of shares and savings vehicles for the extra money that we put in, and those are going to be shared COS MUMMY SAYS SO.

Kewcumber · 07/08/2007 10:59

oh I agree with you Flippy - I won;t be putting any extra money into teh CTF - far too inflexible for my liking and little darlings will be able to blow it all on unsuitable pursuits at 18. I'm far too controlling for that.

I was only talking about the govt contributions.

Flibbertyjibbet · 07/08/2007 12:38

Thank heavens for Kewcumber - I thought I was the only mum not stuffing tons of money into it!
I am far too controlling as well - dp often remarks on it

Desiderata · 07/08/2007 12:47

Blimey! It's by no means a gimmick. I think it's terrific. I've been paying in a set amount every month, raising it by £5.00 per month every half-year.

ds will have pots of cash when he's eighteen. He might blow it, of course, but that's his prerogative. He won't be getting any more!

As I say, last year Family Investments made a 10.6% return on ds's account. This year it might not do so well, but there's plenty of time.

ChasingSquirrels · 07/08/2007 15:43

I'm not putting any extra in it either, I am making savings for potential uni fees etc, and this is all in MY (and dh's) name. If they go to uni it will be there (if needed) to fund it, if not it might fund a nice holiday for us, or go into our retirement savings .

My mum is putting extra into their CTF's, that's her choice, and I think its a nice thing for a grandparent to do (if they choose to do so and have the funds available).

And am lol at the COS MUMMY SAYS SO and hope that you don't really thing you will be able to control what they chose to do at 18 .

redtoenails · 07/08/2007 15:54

must admit I think it is a huge waste of pulic finances. I can't see it encouraging anyone to save who wouldn't have saved already and I'm horrified at what it will be spent on when teenagers get their hands on it. All this talk of encouraging saving and then the government forces anybody who wants higher education into debt!

redtoenails · 07/08/2007 15:56

that should be "public" finances!

Kewcumber · 07/08/2007 16:01

think I probably agree with you. Will probably help a small proportion of sensible teenagers who have feckless paretns who never saved a penny for them or harder up parents who couldn't save for them.

Still, don't look a gift horse....

ChasingSquirrels · 07/08/2007 17:51

It will be interesting to see what they do in schools about it in the future. ds1 (4.10y) already knows about his and that Grandma is putting extra money into it for him.

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