In September 2020, the first of the Child Trust Fund (CTF) policy holders will turn 18 and you are probably wondering what happens next.
If you are soon to turn 18 years of age, this means that your CTF is about to mature. There are then a few options that are available to you:
Option 1
You have the option to reinvest some, or all of your CTF into another product; the aim being that this new investment will also grow and further boost your savings pot.* (though this cannot be guaranteed).
Details of our other products can be found below:
Option 2
You also have the option to ‘cash-in’ your CTF and to receive all or some of the total sum. You will need to have your own bank account.
It is always a good idea to keep us updated with your latest contact details (Email and postal address, and telephone number) to enable us to provide you with factual information about the product, the options available and the processes we will go through to manage reinvestment or pay-out of the monies.
If you want to discuss any of the options above, or you would like to provide us with up-to-date details, then please contact our team on:
(0151) 724 1930
*Future investment growth cannot be guaranteed.
We can't give you advice on what option to choose, but can provide you with factual information.
If you’re in any doubt about what option is right for you, it’s a good idea to talk to an Independent Financial Advisor (IFA). You can find a local financial advisor or via www.unbiased.co.uk. You may need to pay for a financial advisor’s help, so make sure you ask them about their fees first.
10 things to know about CTFs
Take a quick look at what your CTF is all about right here.
Options at a glance
- Reinvest all of the CTF fund into another savings or investment product.
- Reinvest some of the CTF fund into another savings or investment product, and 'Cash-in' the rest.
- 'Cash-in' the CTF in full and receive all monies invested.
- Details
- Performance
- FAQs
Please read through these document for more information about our Child Trust Fund.
It is an investment account for children born on or after 1st September 2002 to 31st December 2010.
The Government made payments into the account and other people can also pay money in.
Yes, there are 3 types:
- Stakeholder CTF accounts
- Non-stakeholder CTF share accounts
- Non-stakeholder CTF deposit accounts
The Unity Mutual Child Trust Fund is a Stakeholder Child Trust Fund.
A “Stakeholder” CTF must meet a number of specific conditions which are shown below.
Charges
a) Charges must not be more than 1.5% of the value of the fund you accumulate. If your fund is valued at £250 throughout the year, this means we deduct £3.75 that year. If your fund is valued at £500 throughout the year, this means we deduct £7.50 that year. The charges on all other types of CTF Accounts are not limited in this way. In our CTF Stakeholder Account, this 1.5% charge is incorporated into the calculation of the Unit Price.
b) There can be no other charges.
Investments
a) Investments must be mainly stock market based.
b) Investments must be spread across the shares in a range of companies. Our CTF Stakeholder Account tracks the performance of the UK Equity market and follows the fortunes of over 600 UK companies whose shares can be bought and sold on the Stock Market.
Payments
a) We must accept any payments from £10 provided it is within the subscription limits for that subscription year.
b) You can pay by cheque, direct debit, direct credit or standing order.
Yes – you, your family and your friends can make additional contributions to your child’s Account.
The most that can be paid in is £9,000 in a 'Subscription Year' (birthday to birthday) with effect from 6 April 2020.
Contributions can be made in a number of ways:
- Regular monthly payments by Direct Debit or Standing Order.
- Payments by cheque – made payable to “Unity Mutual” with your child’s name and unique reference number (URN) on the back.
- Payments by direct money transfer – ensuring your child’s URN is quoted in the transfer
The minimum contribution is £10.
The contribution year runs from your child’s birthday to the day before their next birthday.
All money paid into the account belongs to your child, who can only access it when they reach 18.
Until your child reaches age 15, we use the money paid into their CTF to buy units, at the price prevailing at the next valuation date, in the Unity Mutual Equity Fund. The Fund is single priced.
This Fund tracks the performance of the UK Equity market and follows the fortunes of over 600 UK companies whose shares can be bought and sold on the Stock Market. Spreading the investment over such a large group of companies reduces the risk of individual companies not performing too well.
Yes, the Registered Contact can transfer a Child Trust Fund account to us at any time, free of charge.
Whilst we do not accept transfers into our Child Trust Fund, we do accept transfers from an existing Child Trust Fund account into our Junior ISA. Just contact us if you require further information.
To do this, the Registered Contact can contact us or download our transfer form. Once we are in receipt of your completed form we will contact the other provider, once any cancellation period has expired, and arrange the transfer.
The Registered Contact has the right to cancel the transfer if they wish.
There is no fixed term. However, once the child reaches age 18, the money in the Child Trust Fund account will be taxed in the same way as a normal savings or investment account.
Your child can’t take any money out until they are 18.
This depends on a number of things, such as how much has been paid in and the investment returns on the fund where the money is invested.
The value can go up and down.
101% of the value of the account will be paid to the person with parental responsibility for the child.
If this happens before the child is 18, then it may be possible to draw money out of the account for their benefit. Please contact us for further information.
Money held in a Child Tust Fund account is not subject to income or capital gains tax.
Under current legislation the child will not have to pay tax if they draw the money out of the account when they are 18.
The child might have to pay tax if money is left in the account after age 18.
We will issue a statement each year during the month after your child’s birthday showing what has been paid in and what the account is worth.
You can also access our My Fund Value page and view the current value at any time.
Unit prices are published weekly online, or you can contact us for an update.
