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Child Trust Fund

What are Child Trust Funds?

If you have a child born between 1st September 2002 and 2nd January 2011, they may have a Child Trust Fund - a type of tax-efficient saving. 

You can no longer open new accounts because the scheme is now closed. You can find out more on the Government's Child Trust Fund website.

You can continue to contribute money to an existing fund, or you can transfer the funds to a Junior ISA. If you don't have a Child Trust Fund, you can still open a Junior ISA as normal.

What is the alternative?

Child Trust Funds were replaced by Junior ISAs which are another type of tax-free savings account for children. Here's a bit more about how they work.

Only a parent or guardian can set up a Junior ISA for their child, but anyone can contribute to one.

The money belongs to the child and can only be accessed by them when they turn 18.

There are two types of Junior ISA: Investment and Cash, and a child can have one of each in each tax year.

The Junior ISA allowance is £4,368 for the 2019/20 tax year - this is the total amount that can be paid in across both types of ISA.

What can I do with an existing Child Trust Fund?

If your child has a Child Trust Fund (CTF) there are a couple of things you could consider doing.

Please note that Scottish Friendly doesn't provide advice. So, if you're not sure whether investing in or transferring an existing Child Trust Fund is suitable, you should contact an independent financial adviser for advice. Advisers may charge for providing such advice and should confirm any cost beforehand.

Continue to contribute

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You can continue to add up to £4,368 a year to your CTF account.

Anyone can make a payment into a CTF.

You can't withdraw the money as it belongs to the child and they can only take it out when they're 18.

If you have a Scottish Friendly Child Trust Fund you'd like to contribute to, you can find out more in our help centre.

Transfer it to a Junior ISA

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Because new CTFs are no longer available, you may be able to get a better deal by transferring the funds to a new Junior ISA provider.

You can transfer the funds without this impacting the child's tax-free allowance for the year.

You can arrange a transfer by contacting your chosen Junior ISA provider.

If you're thinking about transferring a Child Trust Fund, take a look at our My Select (Junior ISA).

 

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