The Stakeholder Account is a stock market-based investment, and offers the potential for a higher return than the Cash Savings Account. Consequently, it carries a higher risk than the Cash Savings Account. The risk is spread across a mix of investments, and gradually, from the age of 13, the fund is switched across to a lower-risk fund. However, it is important to note that the value of the child's investment may go down as well as up and the child could get back less than has been paid in.
In order to provide the option of a Stakeholder Child Trust Fund Account, the Yorkshire has chosen to introduce customers to engage Mutual Assurance.
With Stakeholder Child Trust Fund Account from engage Mutual Assurance a lifestyled investment approach is taken. This means the investment takes advantage of the long-term growth potential of the stock market in the child's early years. Then, as they get older, the money that may have built up will be moved to a lower-risk fund.
However, please be aware that the value of the child's investment may go down as well as up and they may not get back all that has been paid in.
A child is eligible for the CTF as long as:
The account can only be opened in the name of a child by a person with parental responsibility for the child. Only one CTF account can be held per child.
An adult opening a CTF account on behalf of a child will become the account's 'Registered Contact'. Once the child reaches 16, any existing 'Registered Contact' on the account can no longer act and the child must apply to become the 'Registered Contact'.
Up to £1,200 of voluntary contributions can be paid into the CTF account in any account year. This is in addition to the initial Government endowment of at least £250 (or £500 for children in families receiving full Child Tax Credit or equivalent benefits as specified by HM Revenue & Customs) and any further Government payment, which the child may receive. Payments can be made in sterling by anyone - parents, family members, friends and the child for whom the account is opened.
If the £1,200 limit is not reached in any account year, any shortfall cannot be carried forward to subsequent years.
An account year runs for 12 months starting on the child's birthday and ending on the day before the child's next birthday. The first account year starts on the date the account is opened and ends on the day before the child's next birthday. It may, therefore, be less than 12 complete months.
Money paid into a CTF account is a gift to the child and is 'locked in'. This means that it can only be accessed by the child when they reach 18. Contributions made to a CTF account cannot be returned to the contributor and no person can make withdrawals on the child's behalf.
No withdrawals are allowed until the child's 18th birthday, when the account will cease to be a CTF account. The only exception to this is if, sadly, the child dies or is diagnosed with a terminal illness and a claim made on behalf of the child is accepted by HM Revenue & Customs.
Any income earned is free of income or capital gains tax, under current legislation. However, this favourable tax treatment may change in the future.
Normally, if parents make a gift into their child's savings account that results in more than £100 a year income for the child (for example, interest on a building society account), the parent is taxed on that amount at their highest rate of income tax. With the CTF, this does not currently apply.
If the voucher is not used to open a CTF account before its expiry date, HM Revenue & Customs will open a Stakeholder CTF Account on behalf of the child with a provider of its choice. The voucher will not be valid after this time.
The CTF account can be transferred to another provider or to a different type of CTF account at any time. However, a child can only have one type of account with any one provider. Transfer will be free of charge or expense except in certain cases connected with the disposal or acquisition of investments.
For more details about the CTF scheme, please contact us on 0845 1200 100 or visit any of our branches or agencies.
In addition, the following HM Revenue & Customs resources are available:
engage Mutual Assurance is a trading name of Homeowners Friendly Society Limited (one of the UK's leading friendly societies), and its wholly owned subsidiary engage Mutual Funds Limited. engage Mutual Assurance works hard to create accessible protection and savings products that are designed especially for families, ensuring that they offer the combination of simplicity and good value for money. They are therefore an ideal choice for the Yorkshire to work with. The equity-based Stakeholder Account is offered by engage Mutual Funds Limited.
engage Mutual Assurance is a trading name of engage Mutual Funds Limited, registered number 3224780. Authorised and regulated by the Financial Services Authority (FSA). Engage Mutual Funds Limited FSA register number is 181487. You can check this on the FSA's register by visiting the FSA's website or by contacting the FSA on 0845 606 1234.
engage Futual Funds ICVC is a limited company with variable capital, registered in England no. IC00044.
There are 3 easy ways to apply:
Please note: Landline calls to 0800 numbers are free. Mobile phone providers may charge.
Yorkshire Building Society is one of the largest building societies in the UK. We offer a range of financial products and services including: savings & investment accounts, insurance products, loans, mortgages and more.
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Yorkshire Building Society is authorised and regulated by the Financial Services Authority (FSA).