Investments

Child Trust Fund


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 £4,000 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 if you wish to transfer your existing Child Trust Fund to us
  • contribute up to £4,000 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 , Key Investor Information Document* and Terms and Conditions in the left hand menu before you apply.

* The KIID is provided for your information by HSBC Global Asset Management (UK) Limited. HSBC Global Asset Management (UK) Limited is responsible for the reliability and accuracy of the KIID.

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.

Who can open a Child Trust Fund?
Anyone age 16 or over who has 'parental' responsibility for an eligible child can open a Child Trust Fund. An eligible child is a child born between 1 September 2002 and 2 January 2011 and in respect of whom a person is entitled to child benefit or any other benefit that may replace it. The Child Trust Fund belongs to your child but you will be the Registered Contact and will manage it until the child is 16 years old. When the child reaches the age of 16 they can apply to become the Registered Contact. You can open an HSBC Child Trust Fund by transferring a Child Trust Fund from another provider.
 
How much can I invest?
You (or your friends and relatives) can currently invest a combined total of up to £4,000 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 £4,000) 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 £4,000) 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 £4,000 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 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 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).
 
What is a Key Investor Information Document ("KIID")?
The KIID is a two page pre-sale document produced for each fund containing clear descriptions of key fund information. The information in the KIID is prescribed by the Financial Conduct Authority rules and is intended to assist customers in making an informed investment decision.

From 1 July 2012, fund providers must produce a KIID for their funds and make them available to customers before they invest. This requirement will apply to the vast majority of funds for sale across Europe.

You should make sure you have received and read the latest version of the KIID before making a final decision to invest and the KIID should be read in conjunction with the HSBC CTF Key Features Document and Terms and Conditions.

The Key Investor Information Document ("KIID") is provided for your information by HSBC Global Asset Management (UK) Limited. HSBC Global Asset Management (UK) Limited is responsible for the reliability and accuracy of the KIID.
 
How do I get a KIID for the HSBC UK Growth & Income Fund - CTF Accumulation share class?
You can obtain a copy of the most recent version of the KIID at any time by calling HSBC Trust Company (UK) Limited on 0845 606 6421. Lines are open from 8am – 6pm Monday to Friday (excluding public holidays). To help us continually improve our services and in the interests of security, we may monitor and / or record your communications with us. The most recent version of the KIID will always be available on our website if you are happy to obtain it online.

As the registered contact, you should ensure that you read the latest KIID before investing in the HSBC CTF. The KIID will be updated on an annual basis no later than 35 days after 31 December. If you are making, or are aware that a third party is making, an additional investment into your HSBC CTF and you have not received the most recent version of the KIID, you should obtain and read a copy of the most recent version of the KIID so that you can make an informed investment decision.
 
How to apply
You can 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.
 
Changing the registered contact
If you need to change the Registered Contact for your Child Trust Fund, please download our Application for a change of Registered Contact and send it to the address on the application form.
You may change the Registered Contact for a Child Trust Fund in the following circumstances:
  • the existing Registered Contact no longer wishes to be the Registered Contact for the Child Trust Fund
  • incapacity or death of the Registered Contact
  • adoption of the child
  • expiration of a previous court order naming the existing registered contact as a responsible person for the child
  • new court order confirming that the existing Registered Contact should cease to be so
  • lost contact with the Registered Contact.
 
Setting up a Direct Debit
If you want to make regular contributions to your Child Trust Fund savings account, please complete our Child Trust Fund Direct Debit form and send it with your application to the address below.

Friends and family can also make regular contributions by completing this form and sending it to us. You will need to give them the account details that we will send to you once we have opened the HSBC Child Trust Fund.

Please see the Child Trust Fund Key Features Document for further details on payment methods. If you are the Registered Contact and you wish to set up or increase your Direct Debit payments, please ensure you read the Key Investor Information before completing this form.
 
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 Financial Conduct Authority'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 for more information.