CHILD TRUST FUND - What's the best deal out there?

[SofiaAmes]

Did you realize that most (all?) of the banks charge at least 1% annual fee on the money that you put into the Child Trust Fund account? I was wondering if anyone had done any research or called around to see if anyone is offering a no fee Trust Fund Account?
It really iritates me that the govt gives this money to my children (without my permission...maybe I don't want them to have a lump sum when they are 18) and then forces me to put it in a special type of account that charges a fee even though they get free use of the money for the next 16 years.

No i didn't realise about tha annual fee, thanks for pointing that out?

Is that on all accounts or just the stake holder ones?

How can they get away with charging? Is it the same charge that is made on all savings accounts? i know they take a portion of your interest don't they. Or is this something additional? If it is then, the obvious thing would be to not put any money in the account other than what the government give and open a different savings account for money we want to save.

Oh please someone come and advise i really don't know what to do now!!

I'd be curious to know what other mothers are finding out!

I don't know why but I am really suspicious about this. A free lunch from the Govt and all that. In any case I would really rather they did something more useful for the future with all this 'money' eg by investing it in a payrise for teachers/nurses rather than by doling it out piecemeal to children many of whom are already more than adequately provided for financially. Then again, it's only a piece of paper for another 18 years or so, I guess. If they really care SOO much why not cash

I think it would be better spent on childcare facilities - with decent pay for childcare workers

I think I read in the information pack that came before the voucher that all the trust fund providers would make a charge. (But I can't be bothered to dig it out and check)

Katzguk told me yesterday that there's a max charge set by govt. We think it's 1.5%, which is what the Boots-supported one charges. I'm going to avoid any that junk-mail me like that like the plague anyway, on principle! Like the look of the cuddly Heffalump, though

Is there an annual fee even for the very simple deposit based accounts?

can't it just go into their normal building society account?

I'm going to put the money the government give me in a child trust fund and then ignore it. I'm planning to save monthly elsewhere and keep control of that money so that I can decide what ds does with it when he reaches 18. I really don't want him to get access to money I've saved as I don't know how responsible he will be.

good idea Otto, we are thinking about that to.

Child Trust Fund Q&A - BBC Radio 4's Money Box Live will be broadcast on Monday, 7 February, 2005 at 1502 GMT.
might be worth a listen.

I am clueless about it all.

Lets get this straight. The govt is giving our kids 250 to be followed by more money when they turn 7. why???? Because they know when our kids grow up there arent going to be any pensions. Will hardly be a pension for us much less our kids. Its a way to get US to save our hard earned, already taxed money for our kids future. Ok, nothing wrong with that, i want to make sure my kids have something and I would never rely on the government anyway. Its not a freebie though, despite the govt media hype. Its a small incentive towards the eventual acceptance of no pension schemes.

purpleturtle - did i discuss this with you in RL rather than on mumsnet?

we are still pondering what to do with DDs

Yep - saw you Tuesday afternoon.

I think that there are 3 types of account that you can put the CTF money into: savings, shares or stakeholder. The stakeholder charges are capped so that's probably what we'll go for. Still haven't decided on one though - it's between barclays, boots and bounty atm...

my reading of the blurb they sent is :

savings version - very safe but not much growth, charges taken out before interest paid
share one - potenitally more growth, but more risk, charge what they like ?
stakeholder - shares to begin with so more growth, but move over to safer investments as child gets nearer 18 - so probably the best option for most people - charges capped at 1.5%

All places have to offer the stakeholder one - but can do others as well if they like.

But how the hell do you choose which one from all the providers ?

purpleturtle - aha, i knew you were here but hadn't 'found' you!!! just wish i had a spare telly for you, DH would kill me if i gave away his playstation telly!!! old telly went to friends as you know!

sorry if this has already been said but whats the difference between CTF providers and CTF distributors? I got dd's voucher today, and looking at the main website about what I should be looking for. What a headache!

Don't know if anybody else feels like me but I am quite annoyed to have received this cheque. It seems like a waste of money to me and I feel it is unfair as ds2 has received the money but not ds1. Now I will feel guilty if I don't set up an account for ds1. Fortunately we can afford to give him the same amount but obviously a lot of people won't be able to do this. TBH its a lot of aggrivation and what will it be worth withuot topups anyway??

Sorry probably should have started a separate thread.

could you deposit it, then draw out half and put it in another account for the other ds?

No nothing can be drawn out until the child is 18 and then only by the child I believe.

ooooh that's a bit rubbish I wasn't sure as we haven't got a cheque yet! I wonder if it would be possible to put the account in joint names, so the proceeds could be split by both upon the yonger one reaching 18? just a thought

I don't think that is possible unless ds2 takes pity on ds1 when he is 18 and decides to share (I doubt it somehow)

I think that a CTF provider is providing the policy and the distributor is merely letting people access to the account through them as a partnership. Something like that anyway. For example, Barclays seems to be a distributor but it's "in association with Family Investments". It's so complicated. I too feel annoyed about this paltry "gift" considering how much NI contributions went up last year!

stripey, me too! I am so furious that the government thinks it's ok for them to choose when MY child gets money and I have absolutely NO say over it. When my dd is 18 she will get that money no matter what. What if (god forbid) she is a heroin addict and the last thing she should have is cash in her hand. HOW DARE THEY presume to know what's best for MY child.

It's not even a proper savings scheme anyway. Anyone who does any sort of financial planning for the future tailors their plans to what they expect their individual child might need. Ugh it makes me so furious. And coupled with the fact that I don't have a real choice in what type of account I put the money into. They all charge 1.5% as far as I can tell. The banks are making out like bandits. I will be doing all further savings in a completely different account that I have control over.

AND try getting some information about it all. The child trust fund "help" line can't actually give you any information about the different types of accounts. And today I went and spoke with my bank manager who said that he's legally not allowed to give me advice either...I have to go to a financial advisor for that! Right, as if they want to know...for £277. He added that he has a child and is getting a voucher and has no idea what to do with his either.