Child Trust Funds (CTF)
Posted by: jean1952
It’s hard not to be confused with all the changes the new government is introducing. They have decided to change the rules about Child Trust Funds and so we thought we would give you the lowdown on what these changes look like.
As you probably know, all UK parents currently receive a £250 voucher from the government on the birth of their child which can only be used to set up a CTF for the child. It belongs to the child and cannot be touched until the child reaches 18 years of age and contributions can be made by family and friends to a combined total of £1200 every year, tax free, to the fund.
The government intends to scrap the scheme from January 1st 2011, so all babies born after this date won’t receive any vouchers.
It won’t have any effect on existing CTF accounts, they will continue to operate as normal.
What is normal at the moment is for another payment of £250 when the child reaches 7 years of age (for families on low incomes or in receipt of benefit).
For children who are entitled to higher rate or middle rate Disability Living Allowance they are awarded either £200 (higher rate) or £100 (middle rate) annually.
As far as we know, these will continue until such time as the government stops the scheme entirely or makes new changes to existing CTF rules. Watch our website for more information.