Child Trust Funds

[statts1976uk]

I know this has probably been done a few times and I have looked at the old forums dealing with the issue and the advice they offered but does anyone have any up to date advice for investments with the £250?

[grumbledoak]

We just stuck ours into cash and pay in the child benefit. It won't earn much, but the markets are not looking brilliant right now and 2012 is coming up.

[Phooey]

Interesting topic. We put ours (daughter - 20months old) into the HSBC stakeholder CTF Fund, and i put in the maximum £1200 year by standing order of £100 month. Don't know if this is the right thing to do OR if there are better ways of investing for our daughter? The other option was to put the £250 voucher into a cash CTF - this is safer in terms of 'investments' but my view was, 18 years in the stock market should hopefully see some 'ups'.

Happy to be corrected - would be interesting to hear others views i.e. Musclcarmad, Beardy10 e.t.c.

[smartie]

my main issue with this was that once they get to 18 they get control of the cash and you can't stop them! It probably wont happen, but if your daughter decides to take the £20K you've put in on her 18th birthday and have one hell of a party......

[Beardy10]

smartie said:

my main issue with this was that once they get to 18 they get control of the cash and you can't stop them! It probably wont happen, but if your daughter decides to take the £20K you've put in on her 18th birthday and have one hell of a party......

That is one of the benefit of setting up a pension for your chidren...they can't get at it. You get basic rate tax relief on contributions too. Yes it might not help them put a deposit on their first home or pay off their student loan but it will mean they are most definitely ahead of the game with their private pension which is no bad thing the way the world is going.

[NoelWatson]

Phooey said:

Interesting topic. We put ours (daughter - 20months old) into the HSBC stakeholder CTF Fund, and i put in the maximum £1200 year by standing order of £100 month. Don't know if this is the right thing to do OR if there are better ways of investing for our daughter? The other option was to put the £250 voucher into a cash CTF - this is safer in terms of 'investments' but my view was, 18 years in the stock market should hopefully see some 'ups'.

Happy to be corrected - would be interesting to hear others views i.e. Musclcarmad, Beardy10 e.t.c.

Ours have self select CTFs. Happy that there is a very good chance that stock market will outperform cash over an 18 year period.

[Beardy10]

Apart from the obvious initial £250 you get from the government is there any advantage to buying a CTF over a normal Unit Trust ? The thing I did notice when I set up my son's CTF was that the initial fees were 5% and then something hefty annually too which can easily be bettered with a normal unit trust. Would a child's savings outside a CTF be subject to CGT ?

[Beardy10]

ISA's have a minimum age of 16 for cash and 18 for shares.

One of Gordon Brown's greatest legacy's is how easy he has made it for us all to plan for our futures.....or not as the case may be.

[Beardy10]

According to this http://news.bbc.co.uk/1/hi/business/2968348.stm kids do pay CGT. Never heard of a Bare Trust ? Anyone else ?