Anyone contribute to a child trust fund?

[kavanf1]

Had a letter through from Liverpool Victoria, who manage both my children's CTF's, advising that they are outsourcing the management of the fund to a third party "due to the current economic climate". I am obviously a bit concerned about this, and am debating whether or not the trust fund is still a good idea. We've been toying with the idea of just putting the money into a high-interest (ha-ha, save your jokes!) account, or something similar - we have no plans to touch it until the children are grown up anyway.

Is anyone else in a similar situation? What have you decided to do? TIA.

[eric pisch]

My parents opened one for me when I was born, put £100 in it, which at the time was a huge amount of money, a mini was £400. When i got my hands on it at 16 it was not even enough to buy the cheapest portable colour tv that argos sold

[Jenn]

We have a CTF with nationwide but only put the government voucher in it. We also have a savings account in our son's name were we regularly put money in.

The reasoning behind this is that we want to be able to take money out should we ever need to (say school trip etc.) and also have some kind of control over it.

[mrtbag]

Originally Posted by kavanf1

Had a letter through from Liverpool Victoria, who manage both my children's CTF's, advising that they are outsourcing the management of the fund to a third party "due to the current economic climate". I am obviously a bit concerned about this, and am debating whether or not the trust fund is still a good idea. We've been toying with the idea of just putting the money into a high-interest (ha-ha, save your jokes!) account, or something similar - we have no plans to touch it until the children are grown up anyway.

Is anyone else in a similar situation? What have you decided to do? TIA.

I was under the impression that once the CTF is open, the money cannot be taken out by anybody but the child. This can't happen before they are 18.

You can transfer to an alternative CTF plan.

[emporer]

I'd advise against putting money into the CTF, stick to a seperate account and manage it yourself that way when little one turns 18 they wont have total control over the money and blow it on the latest Playstation 6 or Xbox 2048!!

[Toasty]

We got a bum deal, my daughter is 7 and was born a year before the CTF and my son is 5, who was born after it was introduced. I looked into investing my son's money in a unit trust CTF, but decided against it, as market performance at that time wasn't great and some of the schemes had quite high charges, to the extent that you wouldn't be making money for a year or two (this is going from memory, so details are a little sketchy)

In the end I went for a CTF standard savings account, which attracts a bonus of 1% interest over my daughters savings account. When trying to get my daughter the same type of account, I drew a blank, which is why I mentioned the bum deal for our situation and thought at the time it made a mockery out of saving for your children.

The upshot is, I'm glad I placed my sons money in CTF standard savings account as I'm convinced his trust fund would now be worthless and at least he's making something on his money, albeit being eroded by the craziness that's happening throughout this "credit crunch"

I know there's a case for riding it out and you could make more money, but people are losing faith in these trust funds, especially when they see their own accounts being batter by 40% a year and I'd rather my lad see something in his account when he turns 18 than not.

Sorry, this is a long way to say, yes, we do contribute to our sons CTF, but it's not a unit trust account, it is more like a standard savings account with a bonus interest rate.

[Liquid101]

We pay into CTF for both of our children. Relatively small amounts at the moment, but with a schedule of payments that will increase over the next 10 years.

We have the unit trust accounts, which are obviously risky, and not performing well at the moment. However, as they are long term investments you have to forget what's happening with them, and have faith that they will perform in the long run.

Ultimately, even if they do perform well, it will probably only make a dent in their education costs - if that's what they choose to do. So we're looking at making alternative provisions as well.

[Toasty]

Originally Posted by Liquid101

We pay into CTF for both of our children. Relatively small amounts at the moment, but with a schedule of payments that will increase over the next 10 years.

We have the unit trust accounts, which are obviously risky, and not performing well at the moment. However, as they are long term investments you have to forget what's happening with them, and have faith that they will perform in the long run.

Ultimately, even if they do perform well, it will probably only make a dent in their education costs - if that's what they choose to do. So we're looking at making alternative provisions as well.

Completely agree with your final sentiments. Regarding the long term investment, unfortunately there is another element to this kind of fund, and that is only the child can use it and that's when they're 18. Yes, we all hope that things recover and funds start earning money again, but in this case it needs to be doing well at the time your child wants / needs the money and chances are funds will recover and crash again unpredictably over time and we can only hope it's riding high when needed.

In normal unit trust funds we have control of when we can withdraw money, so if in 5 years time it's riding high we can shift it to capital. Sorry, I don't mean to put a downer on your decision, I sincerely hope it proves fruitful and I'm sitting here wishing I'd have invested too, I'm just giving you a background to my thinking at the time.

[Decadence]

Originally Posted by emporer

I'd advise against putting money into the CTF, stick to a seperate account and manage it yourself that way when little one turns 18 they wont have total control over the money and blow it on the latest Playstation 6 or Xbox 2048!!

Exactly what we did...the trust fund is a bonus for him to spend on whatever but the main bulk of his money will be separate so he can't fritter it away.