Allocated CTF Accounts - Your Questions Answered
How do I
become a Registered Contact?
What are the
Government standards for a stakeholder CTF
account?
Is a
stakeholder account right for my child?
What is
lifestyling?
Does my
child’s Plan have to be lifestyled?
Who can
contribute to the Plan?
How can
subscriptions be paid?
Can monthly
subscriptions be reduced or stopped?
Can money be
withdrawn from the Plan?
Where are payments invested?
How can I
keep track of the value of the Plan?
Is there a
death benefit?
What are the tax
advantages?
Can Child
Trust Fund accounts be transferred?
What are the
charges?
How do I become the Registered
Contact?
You can download the Registered Contact
Application and return it to us at Customer
Services, Foresters, Foresters House, Cromwell Avenue, Bromley,
Kent BR2 9BF. Alternatively you can phone our CTF Team on
0800 990 022.
Until a Registered Contact is appointed we will send
any correspondence about this Plan to the name and address supplied
to us by HM Revenue & Customs.
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What are the Government standards for a stakeholder
CTF account?
Stakeholder standards for CTF accounts include minimum
subscriptions from £10, a range of payment methods and total
charges of no more than 1.5% of the account’s value each year.
Scheme investments must be suitable and take into
account the need for diversification with lifestyling to
progressively reduce the investment volatility by switching to less
risky assets as the child nears age 18.
Accounts that need stakeholder conditions are not
necessarily suitable investments for a customer, nor do they offer
any guarantee of performance.
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Is a stakeholder account right for my
child?
CTF Accounts can be stakeholder or non-stakeholder but
only one type can be held at any time. Your child’s Plan has been
allocated by HM Revenue & Customs to a stakeholder account as
this is the Government’s preferred way of saving.
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What is lifestyling?
In later years we will progressively redirect
subscriptions and switch units in your child’s Plan to a lower risk
fund, which is invested in gilts and other fixed interest
securities. This is known as lifestyling. The aim is to gradually
reduce exposure to shares and help shelter the Plan from stock
market swings as it approaches maturity.
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Does my child’s Plan have to be
lifestyled?
No. We will inform the Registered Contact when
lifestyling is due to commence which will normally be from your
child’s 13th birthday.
At that time the options are for the Plan to be
lifestyled or, alternatively, to continue to be fully invested
within the Stakeholder Managed Fund 1.
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Who can contribute to the Plan?
To give your child a real financial head start you
should supplement the Government contributions to this Plan.
Friends, family and anyone else can also make payments. All
subscriptions are gifts to the child and cannot be reclaimed by the
donor.
Subscriptions are accepted in date order up to the
maximum limit of £1200 each subscription year. The first
subscription year runs from the date the Plan is opened until your
child’s next birthday. Thereafter, each subscription year runs from
one birthday to the next.
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How can subscriptions be paid?
Regular subscriptions are collected monthly by direct
debit or standing order from each subscriber. The minimum regular
subscription is £10 (£5 for increases) and, each year, we
automatically increase the amounts received from each monthly
subscriber to help the Plan keep pace with inflation.
Single subscriptions can be made by cheque or direct
credit. The minimum is £10.
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Can monthly subscriptions be reduced or
stopped?
Yes. Any monthly subscriber can stop paying or reduce
their monthly subscriptions at any time. Reductions are subject to
a minimum of £5 and a minimum ongoing subscription
of £10.
If any subscriber wishes to stop automatic increases
to their subscriptions they should tell us at least 14 days before
the increase is due.
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Can money be withdrawn from the Plan?
No. All savings are locked in until your child’s
18th birthday. At that age the accumulated fund will be
payable to your child as a cash lump sum to start their adult life
or it could be used for reinvestment.
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Where are payments
invested?
All payments to your child’s plan are initially
invested in the Forester Life Stakeholder Managed Fund 1. The Fund
aims to achieve medium to long-term growth through a conservative
selection of investments consisting of fixed interest and
index-linked securities (stocks) as well as shares. The stocks
provide the Fund with stability whilst the shares provide the
opportunity for growth.
This is a unit-linked investment fund which is divided
into a large number of units of equal value. Every payment and
those of other contributors, buys a number of these units. The
value of each unit depends on the value of the underlying
investments that make up the Fund which is valued each business
day.
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How can I keep track of the value of the
Plan?
The value can be determined at any time by multiplying
the number of units in the Plan by the unit price at that time.
You can view current unit
prices on our website or by telephoning our Unit
Price Information Line on 0800 990011.
In addition, we will send an annual statement within
one month following your child’s birthday to the Registered
Contact. This shows the payments received and the Plan
value.
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Is there a death benefit?
Yes. In the event that your child dies before age 18
we will pay out 101% of the value of units to the child’s legal
personal representatives.
In exceptional circumstances payment may also be
made in the event of your child suffering a terminal illness.
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What are the tax
advantages?
All payments build up in your child's Plan without
personal liability to any Capital Gains Tax or Income Tax. There is
no personal tax to pay by you or your child.
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Can Child Trust Fund accounts be
transferred?
Yes, the CTF rules allow accounts to be switched
between providers free of charge. Details are set out in the
Terms and Conditions, which will be sent
to the Registered Contact for the Plan.
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What are the charges?
Foresters Child Trust Fund is a stakeholder account
and as such meets the standard for ‘capped charges.’
There is an annual charge of 1.5% of the value of the
funds accumulated. If the fund is valued at £250 throughout the
year, this means that we deduct £3.75 that year. If the fund is
valued at £500 throughout the year, this means that we deduct £7.50
that year.
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