Child Trust Fund - From engage Mutual Assurance
The background
The Child Trust Fund is a child savings and investment account developed by the Government with the aim to encourage children and their families to save for the future.
Every child born on or after 1 September 2002, for whom child benefit has been awarded, will receive a £250 Child Trust Fund voucher from the Government. This amount will rise to £500 for children from families who receive full child tax credit. On the child’s seventh birthday the Government will make a further payment of £250 into the child’s CTF; for families in receipt of full child tax credit this will be £500. This is the current proposal and may change in the future. Up to £1,200 in total can be paid into the account each year between family and friends, however any payment made will be treated as a gift to the child and cannot be refunded. Once money is paid in, it is locked in and can only be accessed by the child and not before they reach age 18, except as permitted by CTF regulations.
The Child Trust Fund is a simple way to invest in UK shares and corporate bonds.
Other providers also offer a CTF cash savings account or a non-stakeholder CTF. engage offer a stakeholder Child Trust Fund account. Before investing the
awarded voucher it might help to think about your approach to risk and
return.
Automatic lifestyling
- engage Investment Growth Fund invests in UK shares
- engage High Income Fund invests in gilts and other securities listed on the UK and EU stock markets.
The Government have set out certain rules relating to a lifestyle option and low charges for stakeholder accounts, which engage must abide by. However the fact that a CTF is a stakeholder does not mean that this investment is suitable or that its performance is guaranteed.
The account offers an automatic lifestyling option. At first the money is invested in the engage Investment Growth Fund. When your child reaches the age of 13, the money is gradually moved into the engage High Income Fund. At age 17, the money will be completely switched to the engage High Income Fund. This switch is intended to reduce the risk attached to the investment, and is known as lifestyling. This can be switched on or off if requested.
Please note, as this is not a deposit account, the capital is not guaranteed. The value of the investment can fall as well as rise and the child may get back less than has been invested.
Product details
- If lifestyling is chosen, initially the money is invested in UK shares, then, from age 13 onwards, is gradually moved into gilts and other similar fixed interest securities.
- Automatic lifestyling
- Annual management charge of 1.5%. There are no other charges and no exit fees.
- Minimum investment £5
- Maximum investment £1,200 each year
- Child does not gain access until the age of 18
What do I do now?
You have two options:
- Apply online for a Child Trust Fund through engage Mutual Assurance
- Call engage for more information - contact details
