Introduction to the Child Trust Fund

The Child Trust Fund (CTF) is a long-term savings and investment account for children. The Government has introduced the Child Trust Fund to:

  • Ensure your child has savings at the age of 18;
  • Help your child get into the habit of saving;
  • Teach your child about the benefits of saving; and
  • Help your child understand personal finance.

Children living in the UK for whom Child Benefit has been awarded and who were born on or after 1st September 2002 are entitled to a Child Trust Fund account. To get the account started, the Government will send you a voucher for £250.

The account can give your child a head start as a young adult. It will help your child understand personal finance and the importance of saving for their future. The account belongs to them and when they turn 18, the money is theirs to use as they think best.

Key points about the CTF

  • A long-term savings and investment account where your child (and no-one else) can withdraw the money when they turn 18;
  • £250 voucher to start each child's account;
  • Children in families receiving Child Tax Credit (CTC), with a household income below the CTC limit, will receive an extra payment;
  • Neither you nor your child will pay tax on income and gains in the account;
  • A maximum of £1200 each year can be saved in the account by parents, family or friends;
  • Money cannot be taken out of the CTF once it has been put in - once your child is 18 they will be able to decide how to use the money;
  • The Government will make a further contribution when your child is seven;
  • Not just one type of CTF account - you choose the type of account you want for your child;
  • It will not affect any benefits or Tax Credits you receive;
  • Learning about how to make the most of your money is a key part of the CTF.

Eligibility

Every child born on or after 1 September 2002 is eligible for the CTF, as long as:

  • Child Benefit has been awarded for them;
  • They are living in the United Kingdom; and
  • They are not subject to immigration controls.

The children of Crown servants - including the Armed Forces - posted abroad qualify because they are treated as being in the UK.