Download the full outcome
Detail of outcome
This summary of responses document will be of interest to Child Trust Fund (CTF) providers, as well as children who hold a stakeholder CTF account and their parents.
The document summarises the responses to HM Revenue and Customs’ consultation on lifestyling of CTFs, which took place between 21 September and 14 December 2015. It also outlines the decisions the government has taken and the proposed next steps.
Having carefully considered the responses to this consultation, the government intends to remove the legislative requirement that stakeholder CTFs must be subject to the process of lifestyling. It considers that developments in the market for tax-advantaged savings for children, including the increased choice available to account holders, mean that this requirement is no longer necessary to ensure children and families have access to suitable tax-advantaged savings products that meet their needs.
Legislation to amend the Child Trust Funds Regulations will be introduced to Parliament later this year.
The consultation also seeks views on the potential consequences of removing the legislative requirement that stakeholder Child Trust Fund (CTF) accounts should be subject to lifestyling.
‘Lifestyling’ is the process by which an account provider adopts an investment strategy that aims to minimise variation in the capital value of a CTF caused by market conditions, as the account nears maturity.
It must commence for all stakeholder CTF accounts on or before the account holder’s 15th birthday, unless the registered contact for the account (usually the account holder’s parent) has instructed otherwise.
In 2013, HM Treasury consulted on whether it should be possible to transfer CTF savings to a Junior ISA. In the course of that consultation, a number of respondents questioned the value of lifestyling for many CTF holders. On 22 July 2014, the Government announced that it would consult on the lifestyling requirements for stakeholder CTF accounts.