Child Trust Fund new legislation
New Child Trust Fund (CTF) legislation has come into force which begins to implement the coalition Government’s plans to significantly reduce and eventually cease payments into CTFs.
The legislation makes significant changes to CTF payments. The payments for babies born after 1 August 2010 will be reduced from £250 to £50 for better off families, and from £500 to £100 for lower income families. In addition, the second CTF payment for children who reach the age of 7 on or after 1 August 2010 will be stopped. Additional payments for disabled children will cease on 5 April 2011.
The Government do not plan to make any changes in relation to additional contributions by an existing CTF holder’s family and friends who will remain able to contribute up to an overall total of £1,200 a year. It will also remain possible to change the type of account and/or move it to another provider.