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Child Trust Funds turn 18

Posted by Adrian Lowcock in Press releases category on 27 Aug 20


This September millions of pounds invested in Child Trust Funds launched 18 years ago, finally start to mature, becoming accessible to teenagers for the first time.

HMRC figures show 55,000 will mature each month from September as teens turn 18, with over 700,000 accounts expected to mature every year in total.

The amounts invested will vary, but holders now have several decisions to make about what to do with the money that has accumulated.

“Child Trust Funds have finally come of age and are starting to mature next month, but for teenagers – or indeed anyone – getting a windfall like this can be daunting”, says Adrian Lowcock, head of personal investing at Willis Owen,

“There are lots of options to consider when it comes to how to use the money. Some may want to spend it, and others may want to invest it to make more money for their futures.”

Below, Lowcock outlines five key questions and considerations holders of CTFs should consider before taking any action.

1. Stick or twist?

It is up to the account owner to give the existing Child Trust Provider an instruction on what they want to do with their Child Trust Fund when they turn 18. The holder can transfer the CTF to an ISA and continue to save or invest, and they can opt to move away from their current provider if they wish to. Any matured accounts will be transferred by the provider into either a Mature CTF, Cash ISA or Stocks and Shares ISA. The tax benefits will be maintained but the underlying savings or investments may not be suitable for the holder.

2. Look for the best rates

Many holders may wish to put their money in a cash ISA, rather than take any stock market risks with it. For those so inclined, it's vital to shop around to make sure they get the best rate possible, especially as savings rates on offer are so low currently.

3. Make sure you get what you are owed

All you need to track down a CTF account is your National Insurance Number which you should receive on your 16th Birthday.  You can visit https://www.gov.uk/child-trust-funds/find-a-child-trust-fund to track down any CTF. 

4. Make sure you are happy to withdraw the money if you opt to do so

Recipients should consider their options carefully before deciding as to whether to withdraw the money or not. While it remains in the CTF or an alternative tax-efficient wrapper like an ISA you will not pay tax on it, so think twice before just taking the money out.

5. Have a plan

Ask yourself whether you need the money now and if not then decide when you think you will need the money. If it is longer than 5 years, consider staying invested as the money could grow and help you get a deposit for a house, for example.