01 September 2020 08:40
Child Trust Funds: Around 55,000 young people's fund will mature soon How to boost savings The first Child Trust Funds will mature in September 2020, when the oldest account holders reach 18 years of age. On maturity, these funds in these accounts can either be cashed in or transferred to an adult ISA. If you have a CTF and do not inform your provider about your intentions for the money, it will be held in a protected account until you contact them. The funds in this protected account will still be tax-free and any terms and conditions which applied to the CTF before it matured will be continued. Child Tax Funds will be made available to all children born in the UK whose parents were awarded Child Benefit between September 1, 2002, and January 2, 2011.
Child trust fund plans will mature next week – what you need to know [INSIGHT] Child Trust Funds to mature for first time - 1.8million unaware of it [EXPLAINER] READ MORE Junior ISA eligibility: How JISA is affected by a Child Trust Fund How do Child Tax Funds work? Money held in CTFs belongs to the child and is inaccessible until that child reaches 18 years of age. When a young person or child turns 16, they can legally take over responsibility for their Child Trust Fund account. Once the child reaches 16, they can make their own decisions about the fun, before switching to another provider and transferring it to a Junior ISA which can be done by contacting their CTF provider. The HMRC originally has sent out payment vouchers of £250 or £500, depending on their circumstances, to parents and guardians of qualifying children which could then be used to set up a CTF in the child's name.
MILLIONS of teens are set to enjoy a windfall of up to £2,400 from today, September 1, as child trust funds start to mature for the first time. Around 6.3million child trust funds (CTF) have been set up since their launch in 2002, according to HMRC. 1 Millions of teens are set to enjoy a windfall of up to £2,400 from today, September 1, as child trust funds start to mature for the first time Credit: Getty - Contributor And with the first 55,000 CTF holders turning 18 in September, which means they can access the cash for the first time, HMRC has revamped its free online tool to help you track down lost accounts. Starting from today, HMRC expects roughly 700,000 accounts to mature a year. Under the scheme, parents and guardians received a voucher to deposit into a CTF account on behalf of their child. Vouchers were worth between £50 and £1,000 depending on when children were born, as well as whether parents were on a low income at the time. These needed to be added to special CTF accounts provided by a variety of banks and investment companies, with parents choosing between a cash or stock and shares version. What should I do with lost child trust fund cash? ALTHOUGH parents can no longer open a child trust fund (CTF), they can continue to save into them or transfer the money to a Junior Isa. Both have a limit of saving up to £9,000 a year until the child is 18. It's worth noting that children can take control of their child trust fund account from age 16, although they cannot make a withdrawal until they reach 18. At 16, children can choose to operate their account or have their parent continue to run it, but they cannot withdraw the funds until they're 18. Under new rules, banks and building societies will be allowed to move money in a lost CTF into an Isa account if they haven't heard from the parent or account holder before they turn 18. How much is in accounts depends on what children initially got from the government and whether money was saved in a cash account or a stocks and shares account. If that same money had been saved in cash earning 2% a year it would be worth £668 today. If you're a parent looking for your child's trust fund, you'll either need your child's Unique Reference Number - you'll find this on your annual CTF statement - or their National Insurance number. Where children are in care, and there is no person with parental responsibility available to manage the CTF, the account is managed on the child's behalf by a charity called The Share Foundation.