Child trust fund (CTF)

FACTSHEET No. 56

Child Trust Fund (CTF)

This factsheet explains the basic rules for the child trust fund.

Child Trust Fund - the basics

The Child Trust Fund (CTF) is a long-term tax-free savings account for children born between 1 September 2002 and 2 January 2011. Find out if your child can get an account, how the account works and what to do to get started.

Who is entitled to a CTF account?

Your child is entitled to an account if all of the following apply:

your child was born between 1 September 2002 and 2 January 2011

you were paid Child Benefit for that child for at least one day before 4 January 2011

your child lives in the UK

your child is not subject to any immigration restriction

Your child could be subject to an immigration restriction if they were born outside of the European Union (including on a military base) to non-British parents.

If you haven't already made your claim for Child Benefit, don't delay. Your claim can only be backdated by up to 3 months.

How to claim Child Benefit

Your child is looked after by a local authority (health trust in Northern Ireland)

Your child may still be entitled to a CTF account if both of the following apply:

your child was looked after by a local authority before 3 April 2011

your child meets the other qualifying conditions for getting a CTF account

If a local authority started to look after your child before you claimed Child Benefit, your child can still get an account, as long as they meet the other qualifying conditions.

You work overseas and have been getting a European family benefit

Your child may still be entitled to a CTF account if all of the following apply:

your child was born between 1 September 2002 and 2 January 2011

your child lives in the UK

you were paid a family benefit by another European Union country for at least one day before 4 January 2011

you work in that same European Union country

Countries in the European Union

How the CTF works

For each child that is entitled to a CTF account, HM Revenue & Customs (HMRC) will usually send you a voucher. You use this to open the account in your child's name.

The voucher could be worth £50 or £250 depending on when your child was born and when they became entitled to an account.

The money in the CTF account belongs to the child but can't be taken out until they are 18.

Parents, family and friends can add money to the account up to a limit of £1,200 a year.

You can get extra money paid directly into the account. For example if you're on a low income or your child gets Disability Living Allowance.

There is no tax to pay on the CTF income or any gains (profits) it makes. And the money your child gets won't affect any benefits or tax credits you receive.

Child Trust Fund payments - what your child could get

Adding money to a Child Trust Fund account

How to set up a CTF account

Once you've got the voucher, you need to take it to an approved CTF account provider. They will open the account.

If you don’t get a voucher within a month of receiving Child Benefit, you can usually get a replacement.

You won't get a voucher if a local authority (or health trust in Northern Ireland) started to look after your child before you claimed Child Benefit. HMRC will open an account for your child instead.

If you've been getting a European family benefit and think your child is entitled to a CTF account, contact the Child Trust Fund Helpline to apply for the voucher.

Opening a Child Trust Fund account - a beginner's guide

Understanding the Child Trust Fund voucher

Contact details for the Child Trust Fund Helpline

Managing the account

The CTF account will be in your child's name, but the person who opens the account is responsible for managing it. They are called the 'registered contact'.

The registered contact is the person who:

should keep all the paperwork

reports certain changes of circumstances - for example change of address

is the only one who can change the account or provider

Your child becomes the registered contact and takes over the account when they are 16.

The registered contact can change to a different type of CTF account or to a different provider at any time.

Managing or changing a Child Trust Fund account

When your child is 16 or 18 - effect on their Child Trust Fund

Taking money out of the account

Once the account is opened, no-one can touch the money until your child is 18. Then it becomes theirs.

Should your child become terminally ill or die, different rules apply.

Child Trust Fund: your child is terminally ill or dies

Keeping the account up to date

When the account is up and running there are a number of changes in circumstances you may need to report, for example:

a change of name or address

if a local authority starts to look after your child

a child becoming seriously ill

the child dies

the registered contact dies

Reporting these changes will help you manage the account and keep it up to date. These changes may also affect your Child Benefit payments.

Child Trust Fund: changes of circumstances you need to report

Child Benefit - changes you need to report