Child Trust Fund (CTF) Guide – What happens at the age of 18?
What is a Child Trust Fund?
A Child Trust Fund (CTF) is a long-term tax-free savings account for children that was set up by the Government in 2002. It was designed to encourage children, their families and friends to save for the future.
If you were born between 1st September 2002 and 2nd January 2011 you may have a CTF.
How to find your (or your child’s) CTF?
If you are not sure where your CTF is held, you can find your provider by contacting HMRC, using this link.
What happens when you (or your child) turn 18?
On your 18th birthday your CTF comes to an end (matures). This is when the money in your CTF account will be made available to you tax-free.
Shortly before you reach the age of 18, your CTF provider will write to you. They will inform you they hold your CTF and set out your options upon maturity.
What is your (or your child’s) CTF worth?
Under the CTF scheme, the government issued vouchers worth between £50 and £1,000, depending on when the child was born, as well as the parents’ income at the time.
How much is in your CTF account, will depend on the initial voucher’s worth. Also, what (if any) further contributions were made by family and friends. Plus, whether the money was saved in a cash account or invested in a stocks and shares account.
What are your (or your child’s) options upon turning 18?
This is when you (the account holder) can decide what you wish to do with the money in your CTF. Here are your options:
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Re-invest
You can re-invest the maturity amount in an ISA with your CTF provider, (if they offer an ISA product), or any other provider of your choice. You could find more information about the TFS World Friendly Stocks and Shares ISA here.
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Withdraw
You can have the maturity amount paid directly into your bank account
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Both
You can have part of the maturity amount paid into your bank account and re-invest the remaining balance of the maturity amount in an ISA
What happens if you do nothing?
If you do not respond to your CTF provider, or if you are not ready to make a decision yet, the funds in your CTF will be automatically moved into a CTF protected account on your 18th birthday. That new account will be identical to your previous CTF account and your money will continue to be invested on the same basis. Your funds will be held in that account until you get in touch with your provider.
TFS CTF
If your CTF is with the Transport Friendly Society (TFS), you could find more information here.
TFS World Friendly Stocks and Shares ISA
Do you have a CTF that is approaching maturity and you would like to re-invest your fund into an ISA? You can do that in a TFS World Friendly Stocks and Shares ISA. You would be investing your money in companies that are actively combatting environmental, social and governance (ESG) risks. Therefore influencing positive change.