Introduction to contributing to an account

Making contributions to a child's Child Trust Fund (CTF) account is your choice.

The CTF account offers parents, family and friends the chance to save up to £1,200 a year between them. This is in addition to the contributions made by the Government. Every contribution, no matter how small, will make a difference in the long run.

Neither parents nor the child will pay tax on income or gains in the account.

These savings will build into an asset that children can use as young adults to help them make the most of the opportunities ahead. All eligible children reaching 18 will have some money behind them at the start of their adult lives.

How you can contribute

Anyone can put money into a child's Child Trust Fund (CTF) account if they want to, but they would need to ask the registered contact for the account details in order to pay it in directly.

In any one year there is a limit of £1,200 between all contributors, not for each individual contributor.

If the child has a stakeholder account, it can be topped up by cheque, standing order, direct debit or direct credit. For non-stakeholder accounts it's up to the individual provider how they choose to accept payments.

For the CTF, each year starts from the date of the child's birthday and runs until the day before their next one.  

So next time aunts, uncles or grandparents are struggling for present ideas, why not suggest a contribution to the CTF account? All contributions, no matter how big or small, will help the account grow into a useful sum.

If you need tips on how to save the link below will give you some ideas.

How much you can contribute

It's up to you to decide how much you put into a child's Child Trust Fund (CTF) account. The maximum that can be paid into a CTF account in any year (between the child's birthdays) is £1,200 from all contributors.

Even small payments will make a difference in the long run allowing the money in the account to grow into a sizeable amount over the 18 years.

If a child has a stakeholder account, the provider has to accept a payment of £10 or more (this doesn't have to be a regular payment) but some may accept less - it is best to check with the provider. Payments can be made into a stakeholder account by cheque, standing order, direct debit and direct credit.

There are no rules about minimum contributions for other types of account - this is something to check with the provider. It is also worth checking whether the provider has any rules about how payments are made, e.g. whether by cheque, cash or both.

The maximum amount that can be put into the account each year is £1200. The start date for each year is your child's birthday, except in the first year when the start date is the day the account is opened and the end date is the day before your child's next birthday.

When you first apply to open an account there may be a cooling off period before the account opening process is completed. This gives you the chance to change your mind and open a different account without penalty. But it also means that  the account is not opened until the end of the cooling off period and so money cannot be paid in until then. So if you delay starting the account opening process, you could lose one year's £1200 contribution limit if the cooling off period ends after your child's birthday. You will need to check the exact details with your chosen provider.

If the full £1,200 limit is not used in one year, the unused amount can't be carried forward to the following year. For example, if you contribute £900 to the account in one year, you can't add £1,500 the next year to make up the shortfall.