Baby Bond Stakeholder Child Trust Fund (CTF)
Baby Bond CTF is available to children born from 1 September 2002 to 2 January 2011 only.
It is owned by the child from outset, but an adult with parental responsibility for the child must manage it on their behalf until the child is 16. This person is called the Registered Contact (RC). The child can apply to become the RC at age 16. If they do not, no one is considered to be the RC, but we will continue to administer the plan in accordance with the last instruction given before the child’s 16th birthday.
No money can be withdrawn until the child is 18 (except in the event of the child’s death or terminal illness). At 18 the child can withdraw the money and use it for whatever they wish. If the money is not withdrawn the CTF rolls over into an adult ISA.
Where Baby Bond CTF money is invested
Our Stakeholder CTF invests in an OEIC collective investment fund. This fund invests in the shares of a number of companies representative of those listed on the FTSE All-Share Index. The fund is known as a FTSE All-Share Tracker.
Shares in the OEIC are registered in our name as nominee on behalf of the child. The child does not own any shares in their own name, but they are the beneficial owner of the CTF.
All shares are accumulation shares which means dividends are automatically reinvested, thus increasing the share price. The value of shares goes up and down daily. From age 15 we will gradually transfer investment from shares to more stable assets, to reduce the risk of the account losing value. Investment growth (and the payout at 18) is free from personal taxes. There is no guarantee that the value of the CTF will grow, or that the child will get back as much as has been paid in.
Any number of people can pay into the CTF, subject to an overall maximum of £4,080 a year. Contribution years run from birthday to birthday.
- We accept regular monthly payments, subject to a minimum of £10, by Direct Debit or standing order.
- We also accept lump sum payments, subject to a minimum of £10, by Direct Credit, Debit Card or cheque.
All payments into the CTF are legally gifts to the child, and the payer cannot change their mind later and have their money back. Our Escalator facility provides for a monthly Direct Debit to be increased automatically by a fixed amount every year near to the child’s birthday.
Charges and other information
Our charges are 1.5% of the account’s value each year, and are allowed for in the price of shares.
We issue a yearly statement to the RC, usually within the 60 days preceding the child’s birthday.
The CTF can be transferred to another provider at any time without charge.