What is a Child Trust Fund?

The Child Trust Fund (CTF) is a long-term tax-free savings/investment account for children born between 1 September 2002 and 2 January 2011. All children within this age range have a CTF set up under Government arrangements, which included an initial payment of £250 or £500 from the Government. It was therefore a universal benefit.

An adult in a position of parental responsibility called the Registered Contact acts on behalf of the Child to make sure that the account is properly invested and operated: the account itself is held with a CTF Provider.

The money in the CTF account belongs to the child but can't be taken out until they are 18. Family and friends can add money to the account up to a limit of £4,128 a year, a limit which runs between birthdays. There is no tax to pay on any income or gains within the account.

Although the Government is no longer making payments to this account, CTFs already in existence continue to operate and be open to voluntary contributions.

All Looked After children within this age range had CTFs established: where there was no-one in a position of parental responsibility the Official Solicitor , or the Accountant of Court in Scotland, was appointed as their Registered Contact. The Share Foundation made additional contributions via the Official Solicitor to many of these accounts.

See also 'What is a Junior ISA'.