Child Trust Fund
As the parents of two children born after September 2002, we have recently been sent a couple of Child Trust Fund vouchers for the girls to the tune of £268 each. I’ve finally gotten around to doing some research on the subject to find the most suitable account to open, so I thought I would post up some links and thoughts here in case anyone else finds them useful.
The official Child Trust Fund website is pretty good, and explains the three types of account that you can open with the voucher (basic savings, low-risk stakeholder or full-on investment account), plus has a list of all the providers of CTF accounts.
However, it doesn’t have a facility for comparing accounts side-by-side – for that, you’ve got to dig around a little; I found these two sites set up by individuals going through the same process I was:
- CTF Choice is nicely done, and lists the providers of each different type of account together with their interest rates, charges and other factors;
- CTF Guide is a lot less impressive, but in its favour does have a forum, where parents – including some pretty genned up on investment – exchange information and recommendations on the various types of account.
As someone who – while having a reasonable grasp of financial affairs and investment lingo – is by no means an expert, the various options available (and millions of other first-time investors) are somewhat baffling. My initial feeling was to go for a basic savings account; I understand them, I know what I’m getting, and there are no “charges” being deducted each year – but when you consider the 18-year lifespan of the account(s), the better performance of low-risk trackers or investments begins to look more attractive.
However, I have now read in several places that the fund managers operating the investment accounts are taking the piss a little by charging the maximum possible annual charge of 1.5% – and who’s to say what the investment market is going to do over the next two decades?
We already save regularly for all three children (our eldest often has more money in her account than we do, especially just before payday!), so that’s another decision to make – do we change our saving patterns to take advantage of the (potentially higher) interest rates from the (potentially riskier) CTF account? I’m tempted to agree with some of the comments on the CTF Guide Forum, who said that while it was nice to let the Government money mount up slowly in the CTF account, they still wanted to retain control of their existing savings just in case they didn’t want their kids to get their hands on it when they turned 18…
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Comments
- Steve C
- 2590 days ago
- Just noticed that you’d mentioned my site (google is a wonderful thing) and thought I’d drop a comment in. I’d considered putting a forum in, but as I’ve found in the past and I think CTFGuide is finding, it’s very difficult to get anyone to contribute. Hopefully however people are finding my site useful regardless, my main problem is getting the word out that it exists, web promotion on the cheap is not an easy business!
- #1
