Care and support

Child trust fund

The CTF is a tax-free savings plan for children. It is available to all children born on or after 1st September 2002. CTF is managed by HMRC.

How much is it?

Each child will receive an initial government payment of £250 at birth – £500 for children from low-income families (for instance those on full child tax credit).

Who is entitled to CTF?

If you are entitled to child benefit for a child who is born after 1st September 2002 the child is entitled to a CTF account.

Children in local authority care will qualify for CTF and the government will assist with setting these up.

You do not have to make a claim for CTF

How is a CTF set up?

The person responsible for a child will receive a voucher and information about how to set up a CTF – there are a variety of ‘account providers’, including banks, insurance companies and building societies offering different types of CTF accounts. You choose the provider you wish to use and make an application to them.

Parents will receive a pack to help choose what type of account would be best in the circumstances. Children will be taught about CTF and financial products in school and there is additional information available at: www.hmrc.gov.uk/ctf and a special website at www.childtrustfund.gov.uk

If an account is not set up within a year, HMRC will do this and will contact the person who is claiming child benefit to discuss what to do about the account.

Can any extra money be paid into the account?

• Relatives and friends can pay extra money into the account up to a limit of £1200 per year
• The government will also pay an additional sum of either £250 or £500 on the child’s seventh birthday.

When is the money released?

Parents do not have access to the fund; the money is locked in to the fund until the child is 18, by which time the fund could have grown to several thousand pounds (on current estimates). There are rules for early release of money if a child is terminally ill.

What can the money be used for?

CTF belongs to the 18 year old who may choose to spend the money in the way that best meets their needs.

Can I appeal against a CTF decision?

CTF is subject to the same appeals structure as the social security system – see later.

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