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What is CTF and what to do with one now?

Jenni Hill
Last Updated 14 June 2024

You might have heard CTFs mentioned in the news lately, but what actually are they, and what do you do if you or your child has one? Find out everything you need to know in this guide.

In this guide

What is a CTF?

Child Trust Funds (CTFs) were tax-free savings accounts designed to help parents save for their children’s future. 6.3 million of these accounts were opened in the early 2000s, but it’s thought that up to one million young people are unaware that they have one

If you or your child were born between 1st September 2002 and 3rd January 2011, you could have hundreds or even thousands of pounds sitting in one of these tax-efficient accounts. So how do you actually find it and what can you do with the money once you track it down? 

When did CTF start?

The CTF scheme started on 6th April 2005. It closed to new entrants in January 2011, but many accounts opened before the deadline still exist today. Last year the government reported that over £1.7bn is sitting in these Child Trust Funds, waiting to be claimed by almost a million young adults. The average value stands at around £1,900 each

Did every child get a CTF?

Yes, every child born between 1st September 2002 and 3rd January 2011 got a Child Trust Fund, even if their parents didn’t open one for them. This is because, after a set period of time the government opened accounts for children in this age group who didn’t already hold one. The government also added money to the trust funds on each child’s behalf, regardless of who set up the account. The government initially gave every child a free cash voucher of £250 or £500 for those whose parents were on a low income. A further £250 or £500 was added if the child turned seven before the 31st July 2010.

Learn more: How much should I have in savings?

Can you take money out of a CTF?

Yes, you can take money out of a CTF, but you’ll usually need to be 18 or older. Your provider will usually write to you a month or two before your 18th birthday to find out what you’d like to do with the money. It’s up to you how you use your Child Trust Fund. You could withdraw the money to go travelling, pay for university costs, or buy a car. Alternatively, you could transfer the money to another account such as a Cash ISA.

You can only withdraw the money before your 18th birthday to pay for account management charges or following a terminal illness diagnosis. If you’re 16 or 17, you can take over responsibility for your CTF account from your parent or guardian. So although you can’t withdraw the funds yet, you can transfer it to a Junior ISA. Junior ISAs tend to be more competitive than Child Trust Funds, so you may get a better interest rate if you make the switch. 

Learn more: How to save money

Boost your savings with a 25% bonus

With a Lifetime ISA, you can save for your first home or retirement, and the government will boost your savings by 25%! Plus, with a Tembo Cash Lifetime ISA you’ll benefit from our market-leading 4.3% AER (variable) interest rate.

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How to find and claim my CTF?

If you or your child were born when Child Trust Funds were active and you don’t know which provider holds the fund, you can ask HMRC to locate it for you. If you’re 16 or over and the trust fund belongs to you, you’ll need to know your National Insurance number. If you’re looking for your child’s trust fund, you’ll need to share their full name, address, date of birth and any previous names that you or the child have used. HMRC will then send you details of the Child Trust Fund provider by letter.

Tip: If you don’t get a response within 3 weeks of submitting your request, write to HMRC and include your reference number.

Can I transfer a CTF to a Junior ISA?

Yes, you can transfer a CTF to a Junior ISA if you’re over the age of 16 or you’re managing the fund on behalf of a child under 18. There are two different types of Junior ISA: a Cash JISA or a Stocks and Shares JISA. We recommend comparing Junior ISA products from a range of providers before making a decision. 

If you’re 16 or older, have a think about what you’d like to do with the money in future. If you’d like to spend it within the next few years, you may be well suited to a Cash Junior ISA. 

If you’re happy to wait 5 years or more before spending the money, you may prefer a Stocks and Shares ISA. The money will be invested in the stock market, meaning the value of your investments can rise and fall over time. Stocks and Shares ISAs tend to perform better than Cash ISAs over the long term, but there is a risk you could lose money.

No matter which JISA you choose, your account will automatically turn into an adult ISA when you turn 18. 

How to transfer a CTF to a Junior ISA:

  1. Make a note of the CTF’s details
  2. Visit the website of your chosen Junior ISA provider
  3. Open a Junior ISA
  4. Request a transfer. Once you’ve requested the transfer, your new ISA provider will take care of the rest of the process.

Can I transfer a CTF to a normal ISA?

If you have a Child Trust Fund and you’re over the age of 18, you can transfer your CTF to a normal ISA and protect your savings’ tax-free status. There are two types of ‘normal’ ISA: a Cash ISA and a Stocks and Shares ISA. Cash ISAs are usually best for short-term savings goals, while Stocks and Shares ISAs allow you to invest for the long term. 

You can also choose to transfer the savings into a Lifetime ISA (more on this below).

How to transfer a CTF to a normal ISA:

  1. Make a note of your CTF details
  2. Visit the website of your chosen ISA provider
  3. Open an ISA
  4. Request a transfer

Learn more: Best Cash ISAs in the UK


Know your ISA allowance!

Now that you’re an adult, you’ll have an annual ISA allowance of £20,000 a year. If you have more than £20,000 in your Child Trust Fund, you’ll need to transfer any funds above your annual allowance in subsequent tax years.

Start saving for your first home with our market-leading Lifetime ISA

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Coming soon:

Tembo Cash ISA

We know that your savings goals don’t vanish once you’ve bought your first home, or you might want to deposit more than £4,000 each year. So we’re launching a Cash ISA; so you can save up to £20k each year, tax-free.

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Tax-free deposits up to £20,000

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