What is a Child Trust Fund?

A Child Trust Fund is a special type of savings account set up by the government. Your parent, guardian or HMRC would have opened the account in your name.

At the time of opening, the government would have put anywhere between £50 and £500 into the account depending on your circumstances. This money could either be saved as cash or invested in stocks and shares.

Family and friends would have been able to add money to the account. Because a Child Trust Fund is a savings account, the amount of money that’s in there could have grown over time!

The money would be kept until your 18th birthday after which you would legally gain access. The person who opened it will be managing that account until you turn 18, but from the age of 16 you can take over management if you want and will become the registered contact.

How can I find out if I've got a Child Trust Fund?

You could ask your parents or guardian if they ever set one up for you.
You can go to the HMRC website.
You can also ask the Share Foundation to help you out.

If your Child Trust Fund is invested in stocks and shares, the value may fall as well as rise, and you could get back less than has been invested. If your Child Trust Fund was saved in cash there is less risk, however over the longer-term investments tend to exceed returns from cash savings.

What should I do with my Child Trust Fund?

Once you’ve turned 18 you have access to your Child Trust Fund. The big question is what are you going to do with the money? Let’s go through the options you have!

You can move the money over to an Adult ISA where you can continue to save the money.
You can withdraw the money to spend it.
Or you can do a bit of both, withdrawing some of the money now and continuing to save the rest in an ISA.

It’s important to know that there’s absolutely no rush in making a decision, and you can leave your Child Trust Fund money where it is until you are ready. But you won’t be able to add any more money unless you continue to save into an ISA.

If you choose to invest in a stocks and shares ISA then the value of your ISA can fall as well as rise. Which means that you could get back less than has been invested, as you are investing in the stock market. With a cash ISA there is less risk, however over the longer-term investments tend to exceed returns from cash savings.

Take the time. Do the research. Make sure that you’re making the best decision for yourself.

If you’re unsure about what to do with your Child Trust Fund then have a chat with your parent or guardian, or seek guidance from a well-known trustworthy online source like MoneyHelper or gov.uk.

Be careful of scams and don’t post any of your Child Trust Fund details online. Only deal with organisations that are regulated by the FCA, the Financial Conduct Authority.