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.

We could send the cheque back to the government and complain.

Already looked into that option. If you don't do something with the voucher, the government will invest it for you. You cannot refuse the money on behalf of your child.

another thing to consider with this scheme is that the government make the rules on these trust funds, and they reserve the right to change them. For instance, they can raise the 1.5% maximum fee the bank charges. Or, they can change where the money can be spent... Whatever they like. I will probably accept the £250 voucher into a stakeholder account, but will put my own money elsewhere.

I completely agree that the government has no right to set the restrictions (or lackthereof) on my childs access to money. Silly, crazy waste of taxpayer money. It would be interesting to know how much this scheme will actually cost the taxpayer.

You miserable bunch ! The government is investing money in your children's future and all you can do is complain about the 1.5% that the banks will charge as an admin fee. If you choose for the fund to be invested in shares then of course there are charges associated to this e.g. sharedealing costs, admin, and yes some profits for the bank. The 1.5% is actually quite low compared to other savings products which charge a lot more than this.

My main gripe is that all the literature fails to tell you the real risk associated with one product compared to the next i.e. if you choose shares, then which shares will the fund invest in ? Stable UK blue chips or Japanese junk bonds ? This is where your child could really stand to lose out depending on how those shares perform. Aren't we entitled to know what the investment strategy of the fund is ?

As for not having access to the money for 18 years, I think the aim is avoid the parents drawing it out after six months and spending it on crack!

are there any tracker funds available ?

(haven't looked around yet but I'd like to stick DD's into a tracker fund .. hopefully all share and would expect to pay no more than 1% fees on that kind of fund)

ruthydd - call me cynical but AFAIC the government have no interest in my child's future else they'd be spending money on more important things like reducing pollution, improving services, sorting out housing etc etc. IMO this is just a way of taking £250 plus of our money (all from taxpayers anyway!) and locking it up 'on our behalf' for 18 years. What this really means is that the banks will be over the moon as they have that money to use for the next 18 years and the government can be all smug about how great the economy is looking.

Then in 18 years it'll all come out to be a load of b*llocks but as the government will have totally changed they'll just say 'it's not our fault' and make some more idiotic promises.

And thanks to increasing council tax etc etc many people haven't got any money to save for their kids so no amount of 'encouraging' will change that!!

....Not that I'm jaded or anything

my view

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Well do you know what I did with it. Went into the Abbey and there was a big fuss- had to make an appointment and bring all sorts of ID. So I went to the Yorkshire- had to post the form off there- so went to Barclays- the nice man filled in the form, I gave him the voucher and he gave dd a heffalump.

I honestly think that its swings and roundabouts with a lot of them. Anyway mine's sorted now until she's 18. I'm not putting anything else in it- have sorted savings etc out elsewhere

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We haven't decided yet, but are thinking about shares. More risky, but apparently shares have consistently out-performed any other investments for years, apart from property.

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bump - I am confused as to what to do with mine too - anyone else opened one and if so what experience have they had with the provider?

I invested the twins with royal bank of scotland.

They also said we would recieve discount vouchers _STILL WAITING THOUGH

thanks jambo - just to go off thread - not seen your name on twins threads before...how old are yours - mine 5 months, both boys.

hi my twins are 15 months- boys

because we won't be adding to the fund (don't like the idea of handing a lump sum to 2 18 year olds who may squander it on anything) we've decided to invest with F&C in one of the high risk ventures. Decided that as it's probably not going to be worth much when they are older will do a little speculate to accumlate with the little and maybe it'll turn into a lot, maybe not. I wish we could afford to save a good amount for the kids, but we can't and we certainly aren't going to put money where it can be abused, or where a future government could cancel the whole thing. Too tired to be coherent!

We have set up dd for kids to only £10 per month each but hopefully they will use it sensibly when they are older- like on car, education etc

Well i can dream

More like down the pub with the mates

I was really confused about this when I got my voucher for my daughter, so I did some research and made a website, hope it helps someone.

Child Trust Fund Guide

I'm still semi-confused though! It's not a bad idea, but let down partly due to being over-complicated and having the fixed 18 year term, so the child gets the cash regardless of the fact that they might not be sensible enough to handle it.

For these reasons I'm not paying into my childs CTF but have got a separate tracker fund for her.

But that's just my opinion, not advice in case the FSA are after me

Great website David. Thank you! Do you happen to know if any of the investment options are ethical ones?

Wanted to get on and do this so just set up Stakeholder acc with barclays as they got TWO mentions on this thread!! What a reason
Anyway, it was very easy, all done on the phone and I don't have to put any extra in monthly or ever. Done at last!

"do you happen to know if any of the CTFs are ethical?"

I think that Th Childrens Mutual have an ethical option and some other providers do to. What I'll do is put on my site an indication as to what providers have ethical options, when I get time.

Thanks for the idea!