PMAS Child Trust Fund
Product information
We recognise that saving for your child is a
personal choice, so we offer three different funds for you to
invest in. The choice is up to you – but you need to think
carefully about your attitude to risk. Some of the funds offer the
potential for bigger returns if you’re prepared to take an element
of risk. You can also – within certain limitations – invest in a
mix of funds.
Your choice of funds
If you're looking for a secure fund for your
child’s money, the Guaranteed Cash Fund is the safest option of
all.
The money is invested in cash deposit accounts
and your child is guaranteed to get back at least all of the money
that's been paid in - and the interest added. This type of fund
usually delivers a lower return than a share-based fund, but gives
a full guarantee.
If you want the potential to earn more on your child’s
investment but don’t want as much risk as the Balanced Growth Fund,
the Cautious Managed Fund invests in a mix of higher and lower risk
investments.
This fund invests up to half of your child's
money in shares. The remainder is used for lower-risk investments
such as bonds and gilts, issued by the Government and companies to
raise capital.
There are no guarantees and the value of the investment can go
up or down.
If you want the maximum potential return, you
could choose to invest in the Balanced Growth Fund. To provide
higher growth potential, up to 70% of the money can be invested in
shares in a variety of companies. The rest is invested in bonds and
gilts and other lower risk investments.
There are no guarantees and the value of the
investment can go up or down.
Both the Cautious Managed and Balanced Growth
funds have the potential to make longer term gains. For every
18-year period in the last 40 years, money left for a long time in
accounts that invest in shares have grown more than the same amount
left in a bank or building society savings account.
However, past performance is not a guarantee
of how shares will perform in the future.
Adding Money to the Child Trust Fund account
Anyone can contribute to a Child Trust Fund.
They can:
- Add up to £1,200 in total per year (on top of
the Government's contribution)
- Pay in lump sums or regular amounts by Direct
Debit
- Change payments at any time once set up
- Move money between different funds (only the
registered contact can do this)
The Government has also announced its
intention to make a further minimum contribution of £250 to the
account when your child reaches seven.
When your child reaches 18
On your child's 18th birthday, the account
will stop being a Child Trust Fund account. Your child can get
access to the funds and invest in another savings account or use it
as they wish.
Flexibility
Once you have set up the account, you can
change how your child's money is invested at any time. We’ll tell
you how when the account is set up.
Stakeholder and non-stakeholder accounts
You have a choice of investing in either a
stakeholder or a non-stakeholder account. A stakeholder account
meets certain Government requirements, including maximum charges
and the way it is invested. A non-stakeholder account doesn't have
to. For more information about the two types of account available,
see the key features page.
The table below shows which funds are
available as stakeholder and non-stakeholder accounts.
| Fund |
Stakeholder |
Non-Stakeholder |
| Guaranteed Cash Fund |
No |
Yes |
| Cautious Managed Fund |
No |
Yes |
| Balanced Growth Fund |
Yes |
Yes |
Lifestyling the account
The lifestyling option is an investment
strategy that aims to maintain long term growth while helping to
protect the Child Trust Fund account from the volatility of the
stock market as the child approaches 18. Lifestyling is
automatically applied to the Cautious Managed Fund and Balanced
Growth Fund unless you opt out.
Shortly before your child’s 13th birthday,
investments in these funds are gradually transferred into a
potentially less volatile fund to help reduce the risk
involved.
The following example (subject to change)
shows how much is transferred over time:
| Child's
age* |
% transferred into
less volatile fund |
| 13 |
20% |
| 14 |
25% |
| 15 |
33% |
| 16 |
50% |
| 17 |
100% |
* transfer of investment takes place shortly
before the child's birthday
If the investment is split between the
Cautious Managed Fund and Balanced Growth Fund, money is
transferred from both in the appropriate proportion.
We will contact you before lifestyling starts
to check that you are happy with the decision you have made. You
can also opt in or out of lifestyling at any time by contacting us
on
0845 88 22 999.
How to apply
Before applying make sure you’ve read and
understood the information above, and the key features document.
You can:
You’ll need to have your Child Trust Fund
voucher and – if you want to set up a direct debit – your bank
details with you. The account won’t be set up until we have
received your voucher.
Once the Child Trust Fund is set up, we'll
send you an information pack - including a certificate for your
child's account - and details of how to top up the account or make
changes to payments.