What we learned this week.....
​
Have you used a Child Trust Fund as a route to save for a child with a disability?
​
Child Trust Funds (CTFs) were designed to be a route to encourage young people to save in tax free circumstances. CTFs are managed by an adult until the child takes control of the account at either 16 years – in Scotland – or 18 – in England and Wales.
The scheme is now closed for new accounts, but many families have added to the funds, particularly where the child has a disability or specific need which means the family want to provide extra money to support that person.
This may cause complications. Whatever is in a CTF becomes the child’s absolutely when they reach the age of 16 / 18. This could place it at risk from a number of complicating factors, including:
• Lack of capacity
• Lack of experience when it comes to managing money
• Exposure to others who may wish to take advantage
• Impact on means-tested services
Talk to us about these risks and about other options before you carry on paying funds into a CTF. Similar issues may arise from saving for your child through a junior ISA.
​