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What is a Child Trust Fund You have a new arrival in the family. A wonderful new addition, something that will enrich your life but there is so much to learn and you need to learn it quickly. One of the last things on your mind is the fund for university, or their first car, or their wedding but the Child Trust Fund provides a start for all of these outcomes. The Child Trust Fund is a long-term saving account that the child can withdraw the money from once they become an adult at the age of 18. The government in the UK provides you with a child trust fund voucher or CTF with the value of £250. If your household income is less that £15,575 you will also receive a top up of on top the initial £250. The top up is linked to the amount of Child Tax Credit that you receive. You need to make sure you make the claim your child tax credit within the first three months of the babies birth as the government will only back date the payments for three months. You don't want to miss out. To qualify for a Child Trust Fund your child must: - Been born on or after 1st September 2002 - Not be subject to immigration control - Lives in the UK - You receive Child Benefit for the child There are different types of child trust fund schemes and a large variety of Child Trust Fund providers. The maximum that can be saved, tax free, for a child each year is £1,200. Anyone can add money to the account for the child, it is not just limited to the parents. Everyone from grandparents, aunt, uncles, family friends that can all add money directly into the child trust fund account. When the child reaches the age of seven the government will provide another £250 top up for the account. Those children on lower incomes will receive a further £250 in additional funding. When the child reaches the age of 16 they will be able to make some decisions about how their child trust fund is managed but they will not be able to access the money in the account until they reach the age of 18. Tony Heywood ©
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