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Press comment: Child Trust Fund rule change a positive step as teens set for windfall

15/01/2020

Following a change to the Child Trust Funds Regulations, allowing an account provider to transfer a Child Trust Fund as it matures to an ISA or a protected account where no instruction has been received, please find below a comment from Rachael Griffin, tax and financial planning expert at Quilter:

Rachael Griffin“With the first wave of Child Trust Funds (CTF) due to mature this September, the government has taken a positive step to change the rules so the money can be held in an ISA or a continuation of the CTF (a protected account) should no instruction be given on what to do with the money as it matures.

“Many people won’t know they have these accounts because they have simply forgotten about them or did not know they exist. It is therefore important that the tax benefits they have enjoyed through these accounts continue while providers aim to trace the customer.

“However, providers must keep trying to trace owners of these lost accounts to ensure they can decide what is best for their money. While it is great account holders won’t receive any unexpected losses due to tax, these people need to be aware they have money just idly sitting in an account potentially achieving very little. For those turning 18 in September, it is important to have the conversation with their parents now to discover if they have a CTF.

“The good news for those with one is that these funds are easy to trace and with £700m* due to mature next year there is likely to be a large swathe summing up whether to spend or save it.

“Taking time to have the conversation now about how to use the money will mean that CTF holders can plan ahead. That will give them the chance to make an informed decision about what is best for them and their finances. This could include investing it in an Isa or make use of the government bonus offered through the Lifetime Isa to save for a property or later life.”

 

Following a Freedom of Information request to HMRC, Quilter discovered that £700m worth of Child Trust Funds will mature during the 2020-21 tax year, while the total held in policies due to mature over the next decade had reached £7.5bn.

For more information contact

Gregor Davidson020 7002 716407917 522784gregor.davidson@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £110.4 billion in customer investments (as at 31 December 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Old Mutual International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.

Disclaimer

This announcement may contain certain forward-looking statements with respect to certain Quilter plc’s plans and its current goals and expectations relating to its future financial condition, performance and results. 

By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Quilter plc’s control including amongst other things, international and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing and impact of other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation and other regulations in the jurisdictions in which Quilter plc and its affiliates operate. As a result, Quilter plc’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Quilter plc’s forward looking statements.

Quilter plc undertakes no obligation to update the forward-looking statements contained in this announcement or any other forward-looking statements it may make.

Nothing in this announcement should be construed as a profit forecast.