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Child Trust Fund

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A tax efficient way to save for your child's future

The HSBC Child Trust Fund gives you the opportunity to invest in the next generation. It allows you, friends and relatives to invest up to £3,600 for your child each birthday year - so when they reach 18, they can access the money without paying any tax. It's the perfect birthday or Christmas present - even a little each year can add up to an amazing gift in the future.

  • available to open for eligible children born in the UK between 1 September 2002 and 2 January 2011
  • contribute up to £3,600 per birthday year
  • simple to set up and manage
  • your child has access to the funds when they turn 18 - with no liability for income or capital gains tax
  • The HSBC Child Trust Fund is provided by HSBC Trust Company (UK) Limited.

The HSBC Child Trust Fund offered by first direct and provided by HSBC Trust Company (UK) Limited is an investment product, and since the value of investments may go down as well as up, the child may not get back the full amount of any additional contributions.

The value of any tax benefits described depends on your individual circumstances. Tax rules may change in the future.

 

Child Trust Fund at a glance

A Child Trust Fund is a Government scheme to save or invest money for a child's future - which they will be able to access without any liability for income or capital gains tax when they turn 18. This table will give you a better idea of what's involved - though please make sure you read the Key Features Document and Simplified Prospectus and Terms and Conditions in the left hand menu before you apply.

Our downloads are in a PDF format. To read them you'll need to have Adobe Reader 4.0™ or above. It's free and you can get Adobe Reader here.

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Who can open a Child Trust Fund?
If your child was born on or between 1 September 2002 and 1 August 2010, they will have received a voucher worth £250 before their first birthday, as long as you claimed Child Benefit by 1 November 2010. For children born on or between 2 August 2010 and 2 January 2011, the voucher will be worth £50. You can use this voucher to open a Child Trust Fund account for them - it will be their account, though you will manage it until they are 18 years old. In the meantime, anyone can add money to the account, up to a combined total of £3,600 each birthday year.
 
How much can I invest?
You (or your friends and relatives) can currently invest a combined total of up to £3,600 each birthday year either as a lump sum or with regular payments - the minimum investment is just £10.
 
Where is the money invested?
The HSBC Child Trust Fund is a Stakeholder Child Trust Fund so the fund it invests in has to follow certain rules set by the Government including a low minimum investment and a maximum limit on charges. The HSBC Child Trust Fund invests in the HSBC UK Growth and Income Fund - CTF Accumulation Class, which in turn invests across a wide range of different investments with the aim of reducing risk. Payments into the HSBC Child Trust Fund up to the annual limit in each Birthday Year (currently £3,600) will be used to purchase shares in that fund.

As an investment product, the value of investments may go down as well as up, so the child may not get back the full amount of any additional contributions.

Any payments we receive into the HSBC Child Trust Fund in excess of the annual limit in each Birthday Year (currently £3,600) will be paid into an overflow account within the HSBC Child Trust Fund account and held as cash. On the child's next birthday, up to £3,600 will be paid out of the overflow account and invested as described above. Interest on cash in the overflow account is paid at a rate of 1% below the Bank of England base rate. If the Bank of England base rate is 1% or lower, interest will not be accrued. Please see the Key Features Document and Simplified Prospectus for more information.
 
Are there any fees or charges?
There is a 1.5% Annual Management Charge for managing a Child Trust Fund. The charge will be made within the Fund, which means the effect of the charge is built into the share price - so you won't see it as a separate item on your annual statement. There are no other charges. Please see the Terms and Conditions and Key Features Document and Simplified Prospectus for more information.
 
How can I find out how much the HSBC Child Trust Fund is worth?
We will send you a statement approximately 30 days before the child's birthday each year which will show the value of the HSBC Child Trust Fund.

Share prices can be found at the HSBC Global Asset Management UK website.

From THE HSBC Global Asset Management UK - OEIC Funds page scroll down to 'HSBC UK Growth & Income Fund - HSBC CTF Share Class'. You can calculate the value of your HSBC Child Trust Fund by multiplying the number of shares held in the HSBC Child Trust Fund by the fund share price.

You can also call HSBC Trust Company (UK) Limited for an up-to-date valuation of the HSBC Child Trust Fund on 08 456 066 241 (textphone 08 457 660 391).
 
How to apply
You can apply online by clicking the apply button at the bottom of this page. Alternatively you can print and complete the HSBC Child Trust Fund Application Form and return to us at the address quoted on the application.

You can also apply to transfer an existing Child Trust Fund from another provider to us. Simply print and complete the HSBC Child Trust Fund Transfer Application and return it to us at the address quoted on the application.

If you'd like to talk to a HSBC adviser about the HSBC Child Trust Fund just call 08 456 066 241 (textphone 08 457 660 391). Lines are open 08:00 to 18:00, Monday to Friday (excluding public holidays).
 
Other things you should know
The HSBC Child Trust Fund account is provided by HSBC Trust Company (UK) Limited.

An HSBC Child Trust Fund account belongs to your child. Each payment made into the HSBC Child Trust Fund is a gift to that child, even if the payments are in excess of the annual limit for a Birthday Year and are not invested straight away. Once family and friends have paid money into the HSBC Child Trust Fund it cannot be withdrawn. Money can only be withdrawn by the child when they reach the age of 18. This includes any cash which is being held within the overflow account.

If you decide to invest in a HSBC Child Trust Fund through this website you will be doing so without receiving any investment advice. first direct does not give advice on the HSBC Child Trust Fund. We are not required to assess the suitability of this product for your needs, therefore you will not benefit from the FSA's rules on assessing suitability. If you have any doubts about the investment you should seek advice from a qualified financial adviser.
 
Tax status
Under current tax law, any returns from a Child Trust Fund are free from income and capital gains tax. However, the value of the tax treatment described in the Key Features Document will depend on individual circumstances. Tax rates could change.
 
Withdrawal arrangements
When your child turns 18, they can withdraw money from their HSBC Child Trust Fund.

At maturity, the child will not pay any UK Income Tax or Capital Gains Tax in respect of the investment in the HSBC Child Trust Fund. Any cash remaining in the overflow account will be treated in accordance with the child's tax status at that time.

An HSBC Child Trust Fund account belongs to your child. Each payment made into the HSBC Child Trust Fund is a gift to that child, even if the payments are in excess of the annual limit for a Birthday Year and are not invested straight away. Once family and friends have paid money into the HSBC Child Trust Fund it cannot be withdrawn. Money can only be withdrawn by the child when they reach the age of 18. This includes any cash which is being held within the overflow account.

Please see the Key Features Document and Simplified Prospectus for more information.
 

 

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