Child Trust Fund


Having successfully applied for child benefit, we have received our CTF voucher. This now means we have to choose from the many providers and three types of CTF. I’m not surprised that so many parents never choose one (may be a quarter of all eligible) as it’s quite complicated. Hannah is very risk-averse and would prefer to open a cash account, but I prefer the stocks based versions. I’m not sure I’d choose one of the shares accounts, where you buy into a fund (in the case of F&C an actual investment trust) after my not so hot attempt at share trading last year, instead one of the stakeholder accounts, that track a specified stock index seems safer. All the literature underlines that every 18 year period in the last 40 has shown better returns from the stock market than from cash accounts, so why choose to play safe with a cash CTF? A stakeholder account also has to move the money from shares to cash (or safer investments at least, literature seems hazy) when the child is 13, to reduce the exposure to a stock market crash in the last 5 years.

So I’m tempted by the F&C stakeholder account, which is a FTSE-All Share tracker, getting exposure to the blue chips and rising stars of the lesser indices. It has the advantage of charging less than the norm (1.2% versus 1.5%). I just have to persuade Hannah as well.

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One Response to “Child Trust Fund”

  1. Carolyn M Says:

    We put both A&M’s vouchers into an F&C Stakeholder account – although think it was a European companies tracker, rather than all shares (sorry I can’t remember the details!). It’s definitely a good place to be!

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