Ethical Child Trust Fund

Frequently Asked Questions

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Can I still open a Foresters Friendly Society Ethical Child Trust Fund?
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We will no longer accept Ethical Child Trust Fund applications beyond the 31st July 2010. If you are in the process of applying i.e. you sent in an application form prior to 31st July which has subsequently been returned, we will still honour the application when you return your form.

 

Can I transfer an existing Child Trust Fund into the Foresters Friendly Society Ethical Child Trust Fund? Back to Top

The cut off for transfer requests is the 31st July 2010. If you are in the process of transferring your Child Trust Fund to our Ethical Child Trust Fund, we will continue with the transfer process as long as the original request was received before 31st July 2010.

 

Why are you no longer selling the Ethical Child Trust Fund? Back to Top

Since the Government's decision to discontinue Child Trust Fund policies after 1 January 2011, and the reduction in the value of the voucher from 1st August 2010, the Board took the decision to stop offering the Ethical Child Trust Fund in order to protect the interests of the existing Members of the Society. To sell the policy from 1st August 2010 would not be cost effective.

 

Is my existing Ethical Child Trust Fund or Teddy Trust Child Trust Fund affected? Back to Top

No, the policies that have been taken out will not be affected by the closure to new business. All the terms and conditions that apply to the policy will be honoured and we still aim to add annual/final bonuses to your Child Trust Fund year on year.

 

Can I continue to top up my Ethical Child Trust Fund or Teddy Trust Child Trust Fund? Back to Top

Yes. The policy conditions are currently unchanged which means you can continue to pay in up to £3,600 a year for your child. Top ups can also continue to be made by friends and family. Further information on how to top up your Child Trust Fund.

 

Is there a limit on the amount of top ups? Back to Top

Yes. The total amount of top ups from all sources must not exceed £3,600 per year. It is the responsibility of the person opening the Fund to ensure that total contributions do not exceed £3,600 per year.

If you want to pay in more than £3,600 per year, our Child Tax Exempt Savings Plan can be taken out as well as a Child Trust Fund to further maximise the child's savings.

 

Who can make contributions into the Child Trust Fund? Back to Top

Family, friends, godparents - and anyone else who wishes to - can contribute to the Child Trust Fund. For example, as a birthday or Christmas gift for the child.

 

What other children's savings policies do you have that can be taken in place of the Child Trust Fund? Back to Top

We also provide a Child Tax Exempt Savings Plan which is only available through Friendly Societies. This is a tax efficient savings plan that allows you to pay regular premiums - between £15 and £25 a month, into the policy for a fixed term. This means that you decide when you want the policy to mature for your child or grandchild.

 

Is there any intention to sell on your existing Ethical Child Trust Fund policies to another provider? Back to Top

No, we recognise the importance of having younger generations joining and benefiting from membership to the Society. We currently have no plans to sell the policies on to another provider.

 

How will the government make the extra payment at my child's seventh birthday? Back to Top

Government contributions at age 7 have stopped for children whose 7th birthday falls after 31 July 2010.

For more information on the Government contributions, please visit the Government's Child Trust Fund Website.


Can my child access the money in their Fund before they reach 18?
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No. The Fund is designed to offer a financial head start when the child becomes an adult by providing a cash payment when they turn 18 years old. Under the Government changes, this will remain the same - no withdrawals will be permitted until the child turns 18.

 

How does the Ethical Child Trust Fund have the potential for growth?
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The Child Trust Fund voucher and any additional contributions are invested in the Foresters Friendly Society With Profits Fund. Annual bonuses and a final bonus may be added to the basic sum assured. Once added these bonuses cannot be taken away - helping to grow the value of the cash payment when the child turns 18. Bonuses will depend on the future investment performance and deductions of the With Profits Fund and how it is decided to distribute any profit. The addition of bonuses is not guaranteed and it is possible that the Ethical Child Trust Fund might not receive any annual and/or final bonus.

 

Can you tell me more about Stakeholder Child Trust Funds? Back to Top

Foresters Friendly Society does not offer a Stakeholder Child Trust Fund, but has an arrangement with a partner Stakeholder Child Trust Fund provider 'Engage', who can be contacted on 0800 169 4321.

 

What happens to Child Trust Fund accounts after 31 December 2010?
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Children born after 31 December 2010 will not be eligible to open a Child Trust Fund account.

Accounts already set up for eligible children will continue to benefit from tax efficient investment growth and no withdrawals will be possible until the child reaches 18 years old.

The child's friends and family will still be able to contribute up to an overall total of £3,600 a year, and it will still be possible to change the type of account and/or move it to another provider.

If you want to pay in more than £3,600 per year, or your child is not eligible for a Child Trust Fund, our Child Tax Exempt Savings Plan can be taken out to further maximise your child's savings. Child Tax Exempt Savings Plans are only available through Friendly Societies and offer a tax efficient savings plan that allows you to pay regular premiums of between £15 and £25 a month, into the policy for a fixed term. This means that you decide when you want the policy to mature for your child or grandchild.

 

Can I have access to the money? Back to Top

No. All the money in the Child Trust Fund belongs to your child and is locked in until they reach 18.

 

Do I have control over the money? Back to Top

Until your child reaches 16 you can choose the investments held in the Child Trust Fund. From 16, your child can control the investment decisions if they wish to.

 

Are there any restrictions on how the money can be spent? Back to Top

No. The money belongs to your child and at 18 they are entitled to spend it how they wish.

 

What about tax? Back to Top

Neither you nor your child have to pay income tax or capital gains tax on returns from the Child Trust Fund. Tax rules may change.

 

Can I put the plan in trust? Back to Top

No.

 

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