Child Trust Fund - Asda Financial Services

A Child Trust Fund (or CTF) is a savings and investment account available to children born on or after 1st September 2002 who qualify for child benefit. Child Trust Funds were introduced by the government. Each eligible child receives a voucher for £250. If you're eligible for full Child Tax Credit your child will receive a further government payment into their Child Trust Fund of £250. The first Child Trust Funds were opened in April 2005. All children will receive another government contribution of at least £250 round about their seventh birthday.

The Asda Child Trust Fund is a stakeholder account. This is the government's preferred type of Child Trust Fund with the money being invested in a fund that holds company shares. Shares should produce better returns than cash over the long term. Please remember that past performance is not a guide to the future, and your child could get back less than has been paid in.

When your child reaches 18 years old, they'll receive a tax-free lump sum to spend however they like. They could use this money to help go to university, buy their first car, or travel the world. It could really give them a head start. Don't forget that inflation is likely to reduce what your child could buy in the future however much they receive.

The voucher will be sent to the person who is claiming Child Benefit. To apply for a Child Trust Fund you must be 16 or over and the 'responsible person' for the child you are applying for. The 'responsible person' is someone who is aged 16 or over and who has parental responsibility for the child. Under general law, parents who are married to each other will each have parental responsibility. Where parents are not married, the mother will automatically have parental responsibility as will the father if he is registered on the birth certificate; or parents agree by means of a parental responsibility agreement; or a court so orders. Other individuals who may have parental responsibility include adoptive parents, a step parent under a parental responsibility agreement, testamentary or special guardians, and a person with whom a child is living under a residence order.

No. There is just a simple, fixed yearly administration charge of 1.5% of the value of the account. This is already allowed for in the share price.

Each child's Child Trust Fund account can have up to £1,200 in total added to it each year, and there is no tax payable on the growth in the account.

Yes, any friend or family member can contribute to your child's account. Up to £1,200 a year may be added in total, and any growth in the account will be tax-free. What's more, a Child Trust Fund could be a great way to promote a lifetime savings habit in your child. When they are old enough, they can even add to their own account from money they are given as gifts, or that they might earn in part-time work.

If you're eligible for Child Benefit for your child, you'll automatically be sent a voucher which enables you to open a Child Trust Fund account. Even if you move abroad, the account will remain open, but won't be eligible for any future government contributions.

Each qualifying child will receive £250 from the government. This amount will rise to £500 for children of families who receive full Child Tax Credit.

Transferring your child's Child Trust Fund account to the Asda Child Trust Fund provided by The Children's Mutual is really quick and easy. All you have to do is phone 0845 900 0920* and ask for a ‘transfer-in form’, or you can download one here. Then just fill it in and send it back. When you transfer your child's account you will receive the same great gift as any new Asda Child Trust Fund customer - an Asda Gift Card for £5 when you transfer your account, or a £25 Asda Gift Card if you also set up a Direct Debit for more than £10 a month. You will not be charged for transferring your account, but if your account is a stakeholder account, or one that invests in shares, the existing provider may deduct costs (such as stamp duty and dealing charges) when selling any stocks and shares. The whole transfer process should take only about a month to complete.

If you don't use your child's voucher to open an account with a provider of your choice within 12 months of receiving it, the government will open an account for your child with one of the approved providers on their list.

No. They will simply choose the next name on the list of approved providers, working in strict rotation. Where your child's account ends up will depend on whose name is next on the list. To make sure the Child Trust Fund is set up with the provider of your choice you must act within 12 months of receiving your child's voucher.

When your child reaches the age of 18 they will have access to the money. The Children's Mutual will contact your child to explain their options before their 18th birthday.

Your child can spend the money however they want - to help with university fees, travelling, a car, or even a deposit on their first home. There are no restrictions, though you may want to encourage your child to use their Child Trust Fund payout wisely.

No. A Child Trust Fund will not affect any benefits.

A statement will be sent each year at around the time of your child's birthday, showing how much has been paid into the Child Trust Fund account, and its current value. This will help you keep track of any payments made, and check on the account's progress.

With the Asda Child Trust Fund, the money in your child's account is invested with the aim of getting a good return on the investment, while managing the risks involved. Until the child is 13, the investment is linked to company shares, which have historically produced better long-term returns than cash (but past performance is not a guide to the future). Once the child reaches 13, The Children's Mutual will start to switch investments into lower-risk assets such as government bonds or cash.

You can make a one-off payment of at least £10 at any time. If you do this online you can use a debit card. You can also set up a regular payment by Direct Debit online. Details about other ways to pay are on the 'Existing customers' page.

That is entirely up to you. The maximum that can be paid in in any one year (from birthday to birthday) is £1,200 (not including government contributions).