GUIDE TO INVESTING IN A CHILD TRUST FUND

MAKING THE MOST OF THE CTF THROUGH INVESTMENT FUNDS

The Child Trust Fund (CTF) is a tax-free way of saving for your children. Every eligible child will receive a voucher worth at least £250 to invest in a CTF. In addition, up to £1,200 a year extra can be invested in each account and the money cannot be withdrawn until the child reaches 18 years of age.

This means that the CTF is an excellent way of saving money for your child’s future expenses (such as university fees or the deposit on a home). To ensure that your child gains maximum benefit from his or her CTF in the future, it is crucial that you understand the three options that are available. Two of these options involve some *risk* to the money in your child’s CTF. However, the same two options are also likely to provide more money for your child when they reach 18.

This factsheet explains those options, and will provide you with information to help you decide whether the higher rewards on offer are worth the extra risks involved. It talks about the differences between *cash*, *shares* and *bonds* and helps you think about what may be best for your child’s CTF. It also looks at *Investment Funds* as a simple way of getting a good *return* from your money over the longer term.

If you require technical details of how the CTF works, such as tax benefits, eligibility and withdrawing money, you can refer to our further information section. We also recommend you visit the Government’s official website at www.childtrustfund.gov.uk