Child Trust Fund

What is a Child Trust Fund?

The Child Trust Fund (CTF) is a government initiative aimed at ensuring that all children have a financial asset at the start of their adult life.

If your child is eligible for child benefit, is resident in the UK, and was born on or after 1 September 2002 they should qualify for a CTF account. You’ll get your Child Trust Fund voucher when your baby is born and you’ve applied for child benefit. The voucher you receive can only be invested in a CTF account.

The Child Trust Fund has an important impact on your child’s future. It encourages you to start saving for them, and ensures that when they turn 18, they’ll have a lump sum to kick-start their future. By then, they should also have learnt the benefits of saving for themselves.

The Post Office® Child Trust Fund provided by Family Investments is a stakeholder account. This means that some of your child’s savings are invested in shares, giving it the potential to earn a great return over the long term. Stakeholder accounts are the Government’s preferred option for many children, as they have to meet certain standards, such as:

• capped charges – Our annual management charge is capped at 1.5% of the value of the account  
• risk management – From your child's 13th birthday our fund managers will start to move the investment from shares to lower risk investments, helping to protect your child's savings towards the end of the investment period

Meeting stakeholder standards doesn’t mean that the account is suitable for everyone or that there is any guarantee of future performance.

The Post Office® CTF invests in stocks and shares with the aim to generate long term capital growth while maintaining some stability. The fund currently invests in UK and overseas shares and closely follows the performance of a number of stock market indices in the UK, Far East, North America and Europe.

We believe that, in the long term, investments in shares will usually produce a better rate of return than a protected interest bearing cash deposit account. This is true for almost every 18-year period in the last 40 years*. Although, this isn’t an indication of how they will perform in the future. Investments in shares can go down as well as up, so it's possible that your child could get back less than is invested.

*Source: Barclays Equity Gilt Study 2008

Santander Asset Management UK Limited is the Investment Advisor for this CTF. As the Investment Advisor, they are responsible for making the day-to-day decisions to buy, hold or sell the fund's assets (e.g. shares and fixed interest investments), subject to Family Investments direction and in line with the fund's investment objectives.

Santander Asset Management UK Limited is a division of Santander. They have a presence in 14 countries and manage funds in excess of £100 billion around the world with a team of more than 1,100 professionals.