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The Government is helping get parents into the habit of saving for their kids' future with the Child Trust Fund (CTF).
What is it?
The CTF is a savings scheme for all children born on or after 1 September 2002, who are resident in the UK and who get child benefit. They get a CTF voucher worth £250 to start their account and a further payment of £250 will be made when the child reaches 7. If your household income is below the Child Tax Credit income threshold, you'll get an additional £250 with each payment.
Can I have the cash instead?
That's not how it works. The Government wants each child to receive something at the age of 18. So there's no cash alternative and the money can't be touched by you - only by your child when they reach 18.
How do I get the voucher?
If your child was born between September 2002 and April 2005, and you've claimed child benefit, you should've had a voucher. If your child is born after April 2005, you should receive a voucher shortly after you claim your child benefit. If you don’t receive the voucher you should visit the Child Trust Fund website, a link to which can be found at the bottom of this page.
What do I do with it?
The CTF voucher has to be paid into an account managed by an approved CTF provider. Generally, there are three types to choose from:
- Cash accounts where the capital is secure, and the money will earn interest;
- Accounts that invest the money in shares; and
- Stakeholder accounts invested in shares but with Government-devised rules attached to meet certain criteria.
Barclays has teamed up with leading children's savings provider Family Investments* to offer an investment-based stakeholder account. Any money invested in this type of account may fall as well as rise and your child may not get back the amount that's been invested. A stakeholder account may not necessarily be suitable and its performance is not guaranteed.
If you haven't opened an account a year on from receiving the voucher, the Government will open a stakeholder account for your child with an approved provider and send you the details.
Can I add to my child's account?
Yes. You, relatives and friends can increase the value by collectively putting in up to £1,200 a year. Once funds are paid in, they stay in until the child is 18.
However, if you want to save for your child but take out money for special events, you could open another account such as Barclays Children's Savings. In addition, if you would like more adventurous investment opportunities, Barclays has a range of savings, investment and protection products. However, you might need to save higher amounts and have your money tied up for longer periods.
What will the CTF account eventually be worth?
That depends on the type of CTF account you choose and how it may be impacted by the UK economy, taking into account inflation, interest rates and stock market fluctuations - and, of course, how much additional money you put into the CTF account.
Is it taxable?
Returns on CTF accounts are exempt from income tax and capital gains tax. What's more, your entitlement to other family benefit and tax credits aren't affected either. Remember, tax legislation may change in the future.
Find out more
 The Government's Child Trust Fund site
Child Trust Fund from Barclays
Important information
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