CTFs were allocated to children born between 1 September 2002 and 2 January 2011 as a long-term tax-free savings account. From this month if you’re turning 18, you’ll get access to your Child Trust Fund (CTF). That could be a sizeable pot of money and big financial responsibility, so we’ve put together some tips on how to manage it.
Take time to think about what to do with your CTF
You don’t have to decide what to do with your Child Trust Fund right away. The money will remain in in a 'protected account' until you contact your CTF provider.
So you have time to work out what to do with your money.
If you don’t know, speak to your family and others who contributed to the fund to see what they suggest.
Evaluate what’s best for you based on your circumstances. You may want to move the money into savings account or start an ISA. Shop around to find a savings with a good rate that works for you.
Think about whether you’ll need to withdraw any of the money and check whether you’ll be penalised for doing so.
Invest your money
If you’re thinking about investing the money, you should consider:
- how long you can invest for
- what you might want to avoid investing in, and
- how to create an investment plan.
Sites like Money Advice Service offer free advice on investment related queries. Do your research before making a choice.
Set financial goals and plan
Coming into a large sum of money is a rare opportunity to create some financial stability, so it’s important to be sensible and not squander your cash.
While it may be tempting to splash out, it would be better to set long-term financial goals and think about how the money could help you out. If you’re planning on going to university, for example, it could go towards decreasing your student loan debt.
Educate yourself on how financial products and services work
Your CTF could be one of the largest sums of money you ever receive in your life and you’ll want to make the most of it.
Financial education will help you get a better idea of how to use your CTF to your advantage and manage your finances in general.
For example, do you understand how tax works? Or how to check a payslip? Do you know what compound interest is?
Use our free financial education resources to learn how to manage all your money.
Find out more about the work we do in Financial Education