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Child Trust Funds

A Child Trust Fund (CTF) is a long term, tax-free saving account for children. These accounts were set up by the government to make sure every child that qualifies can start their adult life with a savings account.

Parents or guardians could open up these trust funds for children born between 1 September 2002 and 2 January 2011 when the product was withdrawn and Junior ISAs were introduced.

If you already have a Child Trust Fund

Even though customers cannot apply for a Child Trust Fund anymore, existing Child Trust Fund accounts remain open until the child is 18.

If you already have a Child Trust Fund with Britannia – part of The Co-operative Bank - you can add additional funds up to the annual CTF limit until your child turns 18.

For the 2020/2021 tax year, the annual subscription limit is £9,000 for the birthday year.

The CTF’s will start to mature in September 2020 for children born on 1st September 2002.

When your child turns 18 and the account matures

On the child’s 18 birthday, they are no longer entitled to a CTF. The balance of the account will be moved into a Matured Child Trust Fund. This is a protected account - it will retain its tax-free status and continue to earn interest tax-free until the account holder informs us of what they would like to do with their funds. At this point it will be closed.

The role of the registered contact ceases and the child becomes the legal owner, meaning they have full control and access to the money in the account.

Features of the Matured Child Trust Fund

  • Earn tax free interest (0.06% Tax-free/AER^(variable))
  • This account does not accept deposits
  • Withdrawal(s) must be for the full amount - partial withdrawals are not permitted but multiple transactions are allowed on the same day
  • The account will close when all funds are withdrawn
  • The funds can be withdrawn by cheque, cash in branch or electronic transfers by CHAPS - we charge a fee for CHAPS
  • You can also transfer to another ISA with The Co-operative Bank or another ISA provider
  • Only the child can access the funds

What you can expect from us

We’ll write to you, as the registered contact, to inform you of the upcoming maturity when your child turns 18.

We’ll write directly to them, explaining what their options are and what they’ll need to do for each option. We’ll include an Intentions Form which they can complete and return with their instructions.

Intentions Form

On their 18th birthday, we’ll transfer the legal ownership of the Child Trust Fund to their name. This means that it’s their choice what they want to do with their account. You’ll no longer be the registered contact from this point.

*If the 18th Birthday falls on a Sunday/Bank Holiday the maturity will take place on the next Business Day.

What else you need to know

A Child Trust Fund account beneficially belongs to your child. Any money you or anyone else pays into the account is a gift to your child that they can only access when they turn 18.

You can transfer the Child Trust Fund account into a Junior ISA before they are 18 if you want to. We cant act on your instructions from their 18th birthday. Currently, we don’t offer Junior ISAs, but you can find out more about them at Money Advice Service.

What your child can do with the account

When your child turns 18, they become the legal owner of the account and we can only accept instructions from them. This means it's their choice what they do with their account.

They can:

  • transfer the money to an ISA that accepts such transfers, this can be an existing ISA in their name, or a newly opened ISA with us or another provider - the amount transferred will not count towards their annual ISA allowance. If they choose to transfer to another provider, they will need to contact them to request a transfer
  • transfer the money into a new/existing savings or current account with The Co-operative Bank or another provider
  • close their account
  • or choose a combination of the above options.

Once the account is opened they should send us the Matured Child Trust Fund Intentions Form to transfer funds to the new account.

Keeping your account safe

We want to keep your child’s savings safe from financial crime and fraud. This means that we’ll need an Identification Document and Proof of Address documents from your child before they can access their account unless a simple closure by cheque is required. If so, provided your details have not changed and the cheque is only in your child’s name, you do not need to send identification with your intentions form.

Details of acceptable proofs

For closure requests by cheque, provided the child’s details have not changed and the cheque is only in your child’s name, they do not need to send identification with their intentions form.

Final payments

Once your child turns 18, no further contributions can be accepted into the existing CTF account. You should also know that:

  • cheques should be received at least 4 business days before the maturity date
  • we will collect Direct Debits up to and including the last business day before maturity - they will then be cancelled. If the final Direct Debit is due on a non-business day and the next business day is on, or after, the maturity date, the Direct Debit payment will not be collected
  • any other payments must go into the account by the last business day before maturity
  • you need to cancel any future payment instructions that are due to be received on or after maturity
  • any friends or family who pay into the account arrange any final payments in line with the dates above