Established 1863

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01254 222 700

info@redroseassurance.co.uk

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Child Trust Fund
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Child Trust Fund

We all want to give our children and grandchildren a great start in life.

The Red Rose Friendly Society Child Trust Fund allows investments to be made for the child until they are 18. It is a very flexible way to save – anyone can contribute regular premiums from just £10 per month and add lump sums at any time up to the annual limit (£4,128 for the tax year 2017/18).

The Child Trust Fund is a government backed savings scheme for children born between 1 January 2002 and 2 January 2011. Children born after this date are eligible for the Junior ISA which replaced the government CTF scheme.


Main Product Features

  • Flexible

    Several people can pay in to the CTF at the same time – parents, grandparents, family friends and even the child!

    There is no set premium – you can pay in regularly by direct debit, standing order or cheque and / or invest lump sums at any time up to the annual limit. If you pay by Direct Debit or standing order you can alter the amount whenever you want or even stop paying for a period of time.

    You can transfer a Child Trust Fund from other providers to us, transfer your Red Rose CTF to another provider or transfer it into our Junior ISA.

  • Proceeds at 18

    The CTF is designed to build up a lump sum that is available when the child is 18. No access is available before then (although the CTF can be transferred to another provider) so there can be no temptation to spend it earlier!

  • Tax free

    Under current legislation there is no income or capital gains tax for you or the child to pay on the proceeds when the child is 18 (although tax will have been paid within the fund on dividends earned by shares).

  • Investment

    The CTF invests in the Legal and General FTSE All-Share Index Tracker Fund. It therefore gives access to the stock market and annual statements allow you and the child to see how the CTF is performing.

Things to consider

You will find more information about the Child Trust Fund in the key features document and below are some important points that we want you to be aware of:

  • This is a medium to long term investment (5 years or more) and the proceeds cannot be accessed until the child is 18, although it can be transferred to another provider at any time.
  • The CTF is a stock market based investment and the value will depend upon future investment performance. You could get back less than you have invested.
  • The annual management charge is 1.5%.
  • Inflation will have an effect on the future purchasing value of the CTF.
  • HMRC could change the tax status of Child Trust funds in the future.
Child Trust Fund
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Product Comparison Table

Product
Children's Savings Plan

Child Trust Fund

Junior ISA
Min prem £5 £10 £50 initial
then £10pm
Max Prem £25
(a taxable version is available if a higher premium is required)
£4,128
for the 2017/18 tax year
£4,128
for 2017/18 tax year
Min age at outset Birth Born between 1 Sept 2002 and 2 Jan 2011 Born before Sept 2002 and still <18  or after 3 Jan 2011
Max age at outset 11 See above Born before Sept 2002 and still <18  or after 3 Jan 2011
Min term (years) 10
(must be 16 or older when proceeds taken)
None
but should be considered a medium to long term plan (5 years or more)
None
but should be considered a medium to long term plan (5 years or more)
Max term (years) 30 To age 18 To age 18
when proceeds can be taken, or it becomes an 'adult' ISA
Fixed term Yes No
but see above
No
but see above
Flexible contributions No Yes
can add lump sums, amend or stop regular payments and start again later
Yes
can add lump sums, amend or stop regular payments and start again later
Life cover Sum assured plus all bonuses added to date of death 101% of the CTF value at date of death 101% of the ISA value at date of death
Transferable No Yes
can be transferred from or to another provider
Yes
can be transferred from or to another provider