opening childs trust fund

[reallytinyamy]

Mark and I have been looking into Chloe's trust fund and have been looking at the information sent about the childrens mutual (who offer vouchers if you go with them)

I remember a post a while ago about this and seem to remember people saying they may open one with them. We looked at it and they only offer a stakeholder account meaning there is a chance you could lose money if the stocks and shares they are invested in perform badly (as they are at the moment) rather than just get back the money you put in plus a bit of interest (as in a savings account)

Of course I am not trying to tell everyone what to do with your money but I certainly don't understand all the different accounts and Mark is dealing with it and when he said about this I just wanted to make sure people are aware that this may not be the best option and not to go with it just for the vouchers.

Thanks everyone.

Please dont take this as me preaching I just don't want people to lose their LO's money

 

[princess_bump]

course your not preaching, we too worried about this and ended up opening maddi's with britanna - as recommended by martin lewis, a money expert

 

[supernurse]

It took me ages to decide where to go and I was a bit unsure to start with about going with a stakeholder but stocks and shares have gone way down in the past but generally all round a stakeholder does make a better return than a savings fund.
I decided to go with the stakeholder cause you get an annual statement so if it doesn't look like it's doing well you can move it to a different trust fund.

 

[reallytinyamy]

I decided to go with the stakeholder cause you get an annual statement so if it doesn't look like it's doing well you can move it to a different trust fund.

I thought that you couldn't change the type of account you take out. You can change provider but not the type of child trust fund you go for.

 

[supernurse]

I decided to go with the stakeholder cause you get an annual statement so if it doesn't look like it's doing well you can move it to a different trust fund.

I thought that you couldn't change the type of account you take out. You can change provider but not the type of child trust fund you go for.

In the trust fund brochure - Q. "Can I change the type of CTF account or CTFprovider whenever I want?" A. "Yes you can. There will be no charge for the transfer, but you may have to pay for any costs of bying and selling shares - so check with your CTF provider first."

 

[bev309]

Good advice - but as Supernurse said you can move the account at any time, as on the website:
Key facts about the Child Trust Fund
a long-term savings and investment account where your child (and no-one else) can withdraw the money when they turn 18
neither you nor your child will pay tax on income and gains in the account
£250 voucher to start each child’s account
children in families receiving Child Tax Credit (CTC), with a household income not greater than the CTC threshold of £15,575 for 2008/09 will receive an extra payment, once a CTC award has been finalised (A CTC award must be in place for the time at which child benefit is awarded to get the additional payment. As CTC claims can only be backdated 3 months make sure you don't leave it too late!)

For previous years' CTC thresholds use this link

a maximum of £1,200 each year can be saved in the account by parents, family or friends
money cannot be taken out of the Child Trust Fund (CTF) once it has been put in – once your child is 18 they will be able to decide how to use the money
children can start to make decisions about how the money is managed when they are 16
the Government will make a further contribution when your child is seven - all eligible children will receive a further payment of £250 into their CTF account at age 7, with children in lower income families receiving an additional £250. These payments will be paid around the child's 7th birthday direct into their account
not just one type of CTF account – you choose the type of account you want for your child
at any time you can move the account to a different provider or change the type of account
it will not affect any benefits or Tax Credits you receive.

 

[isil]

I figure the stocks and all that stuff will improve again by the time they're wanting to access the money anyway. I'm not going to worry...I don't worry about money stuff because I have no idea what any of it means! I am happier not knowing! I think we're with bounty but I should've gone with boots as you get £20 vouchers or something!

 

[reallytinyamy]

We're putting Chloes into a normal Nationwide savings account, that way we know exactly how much she'll get

 

[lady3]

We looked at all of the options too, and we figure that in 18 years, hopefully the market will have improved. On the Trustfund website it states that stakeholder accounts have always performed better than savings (but it's still no guarantee). Also, if it's a stakeholder account, then they have to by law, put the money into low risk stocks when your child is 13 years old.

If you're looking for a good high-return savings account, I found it very helpful to look on moneysupermarket.com (or something similar).

 

[supernurse]

Savings accounts interest can go down too although you are guaranteed to earn some kind of interest.
It just depends if your willing to take a risk.

It's kind of annoying cause my other daughter whose 8 has just got a normal savings account cause they didn't do the trust fund back then. If the trust fund Ruby has does do well over the 18 years then she'll potentially have an extra couple of thousand more than Rachel and I can't afford to put extra into Rachel's account.