Who is eligible
Your child will be eligible if they:
 were born on or after 1 September 2002
qualify for Child Benefit
are living in the UK
Your child will not be eligible for a Child Trust Fund if you're an asylum seeker waiting for your asylum claim to be processed.
How much your child will get
The government will send you a CTF voucher of £250 to start your child 's account.
If your child is part of a household getting Child Tax Credit, with a household income at or below £14,155 (tax year 2006 - 2007), your child will get an extra £250 - so £500 in all.
You 'll also get an additional payment of £250 (£500 if you are on a low income) once your child reaches seven years of age.
Issue of the CTF voucher
To qualify for a voucher you have to be claiming Child Benefit for your child.
If you haven 't received a voucher within a month of starting to claim Child Benefit, or if you lose the one you have, call the UK CTF helpline on 0845 302 1470 or textphone on 0845 366 7870 (8.00 am to 8.00 pm seven days a week).
If you don 't open a Child Trust Fund account within 12 months of the date shown on the voucher, the government will open an account for your child.
Types of Child Trust Fund accounts
There are three types of account:
Accounts that invest in shares
These accounts invest your child 's money by buying shares in companies.
Shares give part-ownership of a company, so the value of your account is linked to how the companies performs. It 's important to remember that the value of shares can go down as well as up.
Stakeholder accounts
Stakeholder accounts invest your child 's money in a number of companies in order to reduce the risk. Once your child is 13, this money is moved to lower-risk investments, so your child 's money is safer as they approach 18.
Savings accounts
If you don 't want to invest in shares, you could choose to open a savings account instead. Savings accounts are seen as a safe place to keep money. But the interest paid usually only makes up for inflation - keeping the 'buying power ' of your child 's money the same.
Opening a Child Trust Fund account
You can open a Child Trust Fund account at:
banks, building societies or friendly societies
with fund managers, insurance companies or investment trusts
through local high street shops (working in partnership with providers to make CTF accounts easily available)
Shopping around
Before you open a Child Trust Fund account it's a good idea to shop around to find what different accounts offer before deciding on the right one for your child.
Managing the account
The CTF account will be in the child 's name, but the person who opens it (usually the parent) is responsible for managing it. This includes keeping account statements safe, letting the relevant people know if there is a change of address, and changing the account or provider - depending on the child 's best interests.
Your child will take responsibility of their account for themselves when they reach 18 at which time the money will be available to them.
Adding money to the account
You, other family members and friends can make contributions to the fund up to an annual limit of £1,200. This limit runs from your child 's birthday in one year to their next birthday.
How the account is taxed
The Child Trust Fund is tax-free until your child is 18. This means that neither you nor your child will pay tax on income and gains in the account during this time. Once they reach 18 the fund will be taxed in the normal way.
Other savings accounts for children
If your child isn 't eligible for a Child Trust Fund account, you can still start saving for them. There are many accounts on the market specifically for children.
© Crown Copyright
(www.direct.gov.uk 27/11/2006)
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