Child Trust Funds are a government-led savings program for children More Completion - Completon is the final stage of buying a house More

a savings and investment account which pays out a tax-free lump sum at the end

The Child Trust Fund became effective on 6 April 2005, for children born on or after 1 September 2002. Children in receipt of Child Benefit will receive a sum of £250 in the form of a voucher to be used to open either a cash or equity based account on behalf of the child. Families in receipt of full Child Tax Credit or certain benefits when Child Benefit was first paid will receive a further £250. If an account is not opened within a year, the Inland Revenue will open a Stakeholder account on behalf of the child. Parents, grandparents and friends will be allowed to make additional deposits up to a maximum of £1,200 each year. At age 7 the Government will make a further payment to the account, currently proposed at a minimum of £250, at age 16 the child can begin to make decisions about how the money is managed, and at age 18 the account matures and the child receives the proceeds. No withdrawals are permitted during the 18 year term.