Money for every new baby

The Child Trust Fund scheme

To help give children a financial head start in life, the Government is giving the parents of each newborn child (since September 2002) a voucher worth £250 when they register for Child Benefit. This must be used to open an account – called a Child Trust Fund (CTF) account – on the child’s behalf. Those children in families who receive full Child Tax Credit or who are in Local Authority care will get a further £250 paid into their account by Government.

The Government will also make a second contribution when the child is seven; for most children this will be £250, but those in low-income families and children in Local Authority care will receive £500. It is also considering the possibility of a further top-up in the child’s teen years.

The idea behind the Child Trust Fund is to help parents start saving for their child’s future. Parents, family and friends can add to their child’s Child Trust Fund account by up to £1,200 a year between them, with the aim of helping to build a lump sum payable to the child when they are 18 years old, which they can use for anything they choose. All investment growth in the account is free from both income tax and capital gains tax, and there’s normally no personal tax to pay when the account finishes on the child’s 18th birthday.

If a child becomes terminally ill before their 18th birthday, the parent (or child if they are over 16), may gain early access to the fund, on production of supporting medical evidence.

More information

If you would like more information about the Child Trust Fund scheme please visit www.childtrustfund.gov.uk.

or call us on 0845 900 0920 for more information about the ASDA Child Trust Fund, provided by The Children’s Mutual.

Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm.

Calls charged at a maximum of 5p per minute from a BT landline, other networks may vary. Please note calls will be recorded for training and security purposes or visit our website www.asdafinance.com.