Anyone looked into this Child Trust Fund thing?

[EdJ]

I'm setting up this account for my son and there are a bewildering number of providers. Has anyone done their research and worked out which are the best ones to go for?

Any help much appreciated!

Ed

[SGirl]

I just put mine in the one defaulted to when you don't do anything with it! It's tanked big style, and they make quarterly charges which the parents are expected to pay, or else the money comes directly out of the investment. I asked what they're charging for, actually, since the other funds I've invested in for the little bloke do actually make money rather than costing it, but they couldn't tell me that.

So do your homework and don't just let the CTF administrators invest it. Because they'll muck it up.

Edited by SGirl on Tuesday 7th April 15:09

[NoelWatson]

I do a self select with Selftrade.

[thepeoplespal]

NoelWatson said:

I do a self select with Selftrade.

For the financially unaware, What does that mean exactly? We have went from a position of no knowledge to very specific knowledge without any real explanation.

[NoelWatson]

thepeoplespal said:

NoelWatson said:

I do a self select with Selftrade.

For the financially unaware, What does that mean exactly? We have went from a position of no knowledge to very specific knowledge without any real explanation.

http://www.selftrade.co.uk/services/children/child-trust-fund.php

You have the option of buying a FTSE 100 tracker (Index-Tracking (Stakeholder) CTF), or picking shares yourself (Self-select Shares CTF). I chose the latter so that my son can give me a shoeing in 17 years time when he realises his University beer fund is somewhat lacking.

[johnfm]

NoelWatson said:

thepeoplespal said:

NoelWatson said:

I do a self select with Selftrade.

For the financially unaware, What does that mean exactly? We have went from a position of no knowledge to very specific knowledge without any real explanation.

http://www.selftrade.co.uk/services/children/child-trust-fund.php

You have the option of buying a FTSE 100 tracker (Index-Tracking (Stakeholder) CTF), or picking shares yourself (Self-select Shares CTF). I chose the latter so that my son can give me a shoeing in 17 years time when he realises his University beer fund is somewhat lacking.

Noel, surely you've put it all on a short spread bet on UK property prices??

[NoelWatson]

johnfm said:

NoelWatson said:

thepeoplespal said:

NoelWatson said:

I do a self select with Selftrade.

For the financially unaware, What does that mean exactly? We have went from a position of no knowledge to very specific knowledge without any real explanation.

http://www.selftrade.co.uk/services/children/child-trust-fund.php

You have the option of buying a FTSE 100 tracker (Index-Tracking (Stakeholder) CTF), or picking shares yourself (Self-select Shares CTF). I chose the latter so that my son can give me a shoeing in 17 years time when he realises his University beer fund is somewhat lacking.

Noel, surely you've put it all on a short spread bet on UK property prices??

Unfortunately the market was already pricing in hideous falls, so their views were much in line with mine. The plan for the share investment is to try and persuade my son to hold the shares forever and take out the divi income as a bit of a beer fund. Will give him a chance to get involved in the marekt at a young age. That is the theory, but I think he will sell the shares and blow it on beer within the first month of Uni!!

[7 Sevens]

I selected F&C for my son's trust fund voucher and top it up by the allowed £100/month. This is linked to the FTSE and will trade in share prices before being moved to cash type funds nearer the end of the scheme. Whilst my first year of cash has clearly performed badly perhaps this or next years may build up when/if/should the market recover (i.e my £100 is now buying more). Clearly the return all depends on steady growth and what the market looks like in 10/14 years time when the fund moves from shares to cash.

Like the OP I'm also keen to hear what people are doing. My brother in law is simply paying the same amount into savings accounts so he's taking the less risky approach.

[EdJ]

Thanks for the replies. I'm inclined to take a risky approach with this fund - if a 4 month old child cannot take a long term view, then who the heck can?! Coupled with the tax benefits, it's a no brainer as far as I'm concerned.

Noel - thanks for the info on selftrade - that looks like what I'm after.

[cymtriks]

Don't waste your money.

The government set one up for my kids. I didn't ask for this. I don't want my taxes wasted in this manner. I'd rather give the kids a better birthday present or a trip out somewhere than shove money into this black hole.

Surely, surely you can think of something that the kid would actually enjoy and remember in years to come?

Think back to your own childhood, do you have fond memories of the investment portfolio that your favourite Gran, uncle or big sister set up for you?

Or do you remember the trips to the zoo, the painting that they helped you with or the picnic your mum made for you to eat in the tree house?

Don't kid yourself that this is going to make the future of your family any better, unless you are talking about a very serious ammount of money and you are doing this for some legal or IHT reason.

[EdJ]

cymtriks said:

Don't waste your money.

The government set one up for my kids. I didn't ask for this. I don't want my taxes wasted in this manner. I'd rather give the kids a better birthday present or a trip out somewhere than shove money into this black hole.

Surely, surely you can think of something that the kid would actually enjoy and remember in years to come?

Think back to your own childhood, do you have fond memories of the investment portfolio that your favourite Gran, uncle or big sister set up for you?

Or do you remember the trips to the zoo, the painting that they helped you with or the picnic your mum made for you to eat in the tree house?

Don't kid yourself that this is going to make the future of your family any better, unless you are talking about a very serious ammount of money and you are doing this for some legal or IHT reason.

I agree to some extent. But the government in their wisdom have decided they are going to do this, so clearly I'd be a muppet to ignore it. And just because my son will have a CTF, doesn't mean I won't take him to the zoo once in a while.

[SGirl]

Well, personally I set up a savings account for SBaby as soon as he was born. I've been paying into that on a monthly basis ever since. It's vaguely irritating to be told by HMGovt that you should think about your child's future and start saving for it when you already did, several months before they thought of it!

The advantage of this approach is that SBaby can get his sticky mitts on the money when I'm ready to let him have it. If he's not mature enough at 16 to spend it on something sensible, I can hang on to it. The HMGovt scheme defines when the money is to be paid out, doesn't it?

If you don't use the £250 voucher they send you, they'll just set you up an account anyway.

But I agree that there are better ways to use money than to give every baby born £250 to invest. It's just another way for Labour to "buy" their core voters.

Edited by SGirl on Wednesday 8th April 11:34

[LeoSayer]

SGirl said:

The advantage of this approach is that SBaby can get his sticky mitts on the money when I'm ready to let him have it. If he's not mature enough at 16 to spend it on something sensible, I can hang on to it. The HMGovt scheme defines when the money is to be paid out, doesn't it?

AFAIK as soon as you put money into a CTF it belongs to the child who is allowed to withdraw from it at age 18 regardless of your wishes.

[cymtriks]

EdJ said:

cymtriks said:

Don't waste your money.

The government set one up for my kids. I didn't ask for this. I don't want my taxes wasted in this manner. I'd rather give the kids a better birthday present or a trip out somewhere than shove money into this black hole.

Surely, surely you can think of something that the kid would actually enjoy and remember in years to come?

Think back to your own childhood, do you have fond memories of the investment portfolio that your favourite Gran, uncle or big sister set up for you?

Or do you remember the trips to the zoo, the painting that they helped you with or the picnic your mum made for you to eat in the tree house?

Don't kid yourself that this is going to make the future of your family any better, unless you are talking about a very serious ammount of money and you are doing this for some legal or IHT reason.

I agree to some extent. But the government in their wisdom have decided they are going to do this, so clearly I'd be a muppet to ignore it. And just because my son will have a CTF, doesn't mean I won't take him to the zoo once in a while.

The rest of us ignore most of what these idiots do most of the time. They are not doing it in anybodys wisdom at all. God knows what they think they'll achieve by this.

Just ignore them and the CFT will be droped into the default system. You can then ignore that too.

If you really must invest in your kids why not buy them something that they can actually enjoy. I know there aren't many investments that fit into this category but there might be some group that he could join or some hobby that you could pander to for a bit.

Some shares have perks that kids might be interested in (Thorntons and City Centre Restaurants give money off their products IIRC, most kids will love to get a money off ticket for chocolate or pizza) and the buying and selling could be turned into lessons about graphs, counting, money, business and investment. A whole lot more fun and usefull than whay you're considering!

[lost in espace]

My lads is invested in a tracker and is worth half what it was, well done GB.

[twister]

cymtriks said:

Think back to your own childhood, do you have fond memories of the investment portfolio that your favourite Gran, uncle or big sister set up for you?

Not during my childhood, no. But then, it wasn't until I was in my early 20's that I learned about the 25 year investment plan my parents had started for me when I was born, and which matured just in time to pay the deposit on my first home...

Would my childhood have been any happier if they'd instead spent the 20-odd quid a month on extra stuff for me back then? Probably not. Does owning my own home make me happy now? Definitely. So I'm eternally grateful that my parents took the balanced view that providing for my future was just as important as providing for my here and now.