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Child Trust Funds Announcement

Child Trust Funds Announcement

The Government announced on 24 May 2010 that it intends to reduce and then stop all government contributions to Child Trust Funds.

Further details are available on the HM Revenue & Customs website. This link will open the page in a new window

Child Trust Fund

Your child’s future is filled with all sorts of exciting possibilities so you’ll want to give them the best possible start. That’s why opening the Child Trust Fund with your Government voucher is the perfect option. It’s the first step towards building a healthy savings pot in the years to come.

The Child Trust Fund is a long term savings account designed especially for children born on or after 1 September 2002. It’s opened exclusively with your Child Trust Fund voucher and savings are locked away until your child turns 18. There are two types of Child Trust Fund accounts for you to choose from.

Britannia Cash Child Trust Fund

This non stakeholder account is provided by Britannia.

Stakeholder Child Trust Fund

A share based stakeholder account provided by The Children's Mutual.

If you require more information about The Children’s Mutual Child Trust Fund account, please see the Children's Mutual website www.thechildrensmutual.co.uk for more information, and to apply. To help you decide which account is right for you, the table below summarises the differences.

This table shows the main differences in the 2 types of Child Trust Fund Account we offer
Britannia's Cash Child Trust Fund Stakeholder Child Trust Fund
Provider Britannia The Children's Mutual
Where invested Cash based savings account Stocks and shares based fund
Benefits
  • Savings are not exposed to stock market risk
  • Interest rates are variable and can rise
  • No charges
  • Potential to earn greater returns by investing long term in a stocks and shares based account
  • To help protect any growth on the account, the balance is transferred to less risky assets from your child's 13th birthday
Risks
  • Interest rates fall
  • As with any savings account, inflation may be higher than the interest. This could reduce the true value of your child's money
  • Value of shares can go down as well as up
  • Your child may get back less than the amount paid in
  • As with any investment, inflation may be higher than the return. This could reduce the true value of your child's money
Charges No charges Annual charge capped at 1.5% of the account's value
Additional contributions Minimum of £1 via Britannia branch or post Minimum of £10
Opening your Child trust Fund You can apply to open a Cash Child Trust Fund at any Britannia branch, through the post, or by downloading an application form from our website and posting it to us You can apply to open a Stakeholder Child Trust Fund via The Children's Mutual website www.thechildrensmutual.co.uk Please note the Stakeholder Child Trust Fund cannot be opened through Britannia.

All Child Trust funds have the following features:

  • Run until the child is 18 years old
  • No withdrawals are allowed until the child is 18
  • All money in the account belongs to the child and cannot be returned to the donor
  • Must be started with the Government's voucher worth at least £50
  • Add to your child's savings any time up to the maximum of £1,200 per year from your child's birthday (excluding the Government's voucher amount)
Summary Box
Key Product Information for our Savings Account
Account Name Cash Child Trust Fund
Interest Rates (AERs) The interest rate payable is variable. View interest rates here.
Tax Status Interest is paid tax free*
Condition for bonus payment An extra 1% tax free* interest bonus is payable for the first 2 years from the account opening date
Withdrawal arrangements No withdrawals are allowed until the child is 18. The account may be transferred to another provider free of charge.
Access Britannia branch and by post

Features

  • Option to transfer^ an existing Child Trust Fund account (your current provider can tell you about anything which may affect the value of your child’s fund if you transfer)
  • Save monthly by direct debit or whenever it suits you
  • Interest is paid annually on the first working day after 1st January by adding it to this account
  • Statement based account - receive an annual statement around your child’s birthday, plus we’ll send you a new statement whenever you wish to check your balance

Tax

Any interest on this product is paid tax free*. This depends on the individual's circumstances and may be subject to change in the future.

^If you already hold a Child Trust Fund account with another provider but wish to transfer you can. Complete and send us your application form, ensuring you also complete the 'Transferring from another provider to Britannia' section. Post your application to us and we'll do the rest.

*For an explanation of terms such as AER, Gross and Net, please see our glossary this link will open the page over the top of your current page.

Britannia is a trading name of The Co-operative Bank plc, which is a member of the Financial Services Compensation Scheme (FSCS) that would pay compensation to eligible customers in the unlikely event of the Bank becoming insolvent. Find out more

www.britannia.co.uk