Child Trust Fund (CTF) was a savings and investment account for children that is no longer in effect. [date: January 2014]
NOTE: Child Trust Funds are closed to new accounts
On 24 May 2010 the Government announced that it intended to reduce and then stop Government payments to Child Trust Fund accounts. Parliament has now passed the Regulations necessary to introduce the first stage of these changes with effect from August 2010.
You may be able to open a Junior ISA instead.
Children living in Northern Ireland for whom Child Benefit is being received and who were born on or after 1 September 2002 were entitled to a Child Trust Fund account. The Government sent out a voucher for £250 automatically.
The Child Trust Fund was a Government initiative aimed at:
- Helping people understand the benefits of savings and investing
- Encouraging parents and children to develop the savings habit and engage with financial institutions
- Ensuring that in future children have a financial asset at the start of adult life to invest in their future
- Building on financial education to help people make better financial choices.
All children born on or after 1st September 2002, who were eligible for child benefit and RESIDENT in Northern Ireland, qualified for a Child Trust Fund account.
Children who lived in the UK, but who did not get Child Benefit because of certain EU legislation or international agreements, may have been eligible for the CTF.
HM Revenue & Customs provided a voucher worth £250 with which to open a Child Trust Fund account. Children from families who were eligible to receive the full tax credit qualified for a further £250 paid directly into the account later on.
Any growth was free of income tax and capital gains tax and there was no tax to pay on withdrawal.