Child Trust Funds



What Is a Child Trust Fund?

In January 2005 the Government began sending Child Trust Fund vouchers to the parents of children born after 1 September 2002. This voucher must be used to open up a Child Trust Fund account. The account is designed to provide the child with a cash lump sum when they reach the age of 18. To ensure the money is given time to grow, the money is locked away until the child is 18 and cannot be accessed before then.

Once they reach 18, however, they can use the money as they wish. For example, the money from the account could be used to help towards university costs, vocational training, or towards a deposit on a house.

To build up a reasonable lump sum for the child’s 18th birthday, you could consider making additional payments into the Child Trust Fund. Minimum payments into the NatWest Child Trust Fund account are £10 and anyone can contribute, as long as the total of all contributions do not exceed £1,200 from the child’s birthday in one year to the day before the child’s birthday the next year. Any additional money you or any other person invests will belong to the child it has been invested for.



What types of Child Trust Fund are available?

There are three types of Child Trust Fund accounts:

o Savings accounts: any money you invest will be secure, but you should consider that although the investment will earn interest, it might not grow as much as if it was invested in shares.

o Non-Stakeholder accounts: the child’s money is used to buy shares in companies. This type of account has the potential to do well in the long term. However, the value of shares can fall as well as rise and you might not get back the value of your original investment. The charges on this type of account are usually set as a percentage of its value.

o Stakeholder accounts: these also invest in shares, but the Government has set rules that aim to reduce the risk by spreading it across a variety of investments. Also, they have limited the charges for this type of account to a maximum of 1.5% a year. The charges on other Child Trust Fund accounts are not limited in this way.


The NatWest Child Trust Fund

We’ve teamed with Morley Fund Management, who is one of the UK’s largest Fund Managers, to provide a Child Trust Fund Stakeholder account that aims:

o To increase the value of the account in a tax-efficient way for the benefit of the child;
o To invest the money contributed to the account principally in a mixed portfolio of UK equities and bonds with the aim of providing long-term capital growth and income
(although any income is accumulated into the investment).
o Please remember that the value of shares in this type of account can fall as well as rise and you might not get back the value of your original investment.

Full details of the NatWest Child Trust Fund Stakeholder account can be found in our application pack – see the different ways of ordering your pack below.


Up to £500 worth of money off vouchers

When you return your completed application form and voucher to us, we’ll send you a booklet of money off vouchers worth up to £250, which could help you save money on purchases with top names such as Adams, Penguin Books and Toys R Us.
 
What’s more, if you make regular contributions to the NatWest Child Trust Fund via Direct Debit of at least £10 per month, we’ll send you a further set of money off vouchers, again worth up to £250 - which could mean you save around £500 in total.
Terms and conditions apply to the money off vouchers, such as minimum spend. And, please remember, any additional money you or any other person invests will belong to the child it has been invested for.


Personal Review

If you want to save more than this for your child’s future or if you want to discuss savings or other products and services for your family, simply speak to a member of staff today to arrange a Personal Review.

For more information on the NatWest Child Trust Find see our FAQs