Child Trust Fund (CTF)
A legacy tax-free savings account for children born between 1 September 2002 and 2 January 2011. Existing CTFs continue to grow tax-free and can be transferred to a JISA.
By Omair SaoLast reviewed — rates for the 2026/27 tax year. See how we check our figures.
How It Works
The government provided a £250 or £500 voucher at birth. Parents and others can add up to £9,000 per year. The account grows tax-free until the child turns 18. Can be transferred to a JISA.
Tax Treatment
All interest, dividends, and capital gains are completely tax-free, identical to a JISA.
Tax Advantages
- All growth is completely free of income tax and CGT
- Can be transferred to a JISA without losing tax-free status
- The original government voucher has grown tax-free since deposit
Who Is This Suitable For?
Families with children who already have a CTF. Consider transferring to a JISA for better rates and options.
Worked Example: Moving a £5,000 CTF into a Junior ISA before 18
- 1A 16-year-old born in 2010 has £5,000 in a cash CTF paying an assumed 1.5%: £75 of interest a year.
- 2The parent opens a cash JISA paying an assumed 4% and asks the JISA provider to bring the CTF across; the transferred balance does not count towards the £9,000 annual limit.
- 3Interest becomes £200 a year, £125 more, and stays tax-free.
- 4Over the two years to 18 that is £250 extra before compounding, with no change to who owns the money.
Result: The transfer is free and keeps the tax status; the main cost of doing nothing is years of drift on a stale rate.
Illustrative figures using the 2026/27 rules on this page, last checked on 25 September 2026.
Advantages and Drawbacks
Advantages
- Every account started with a government voucher of £250 or £500, so even families who never added a penny have something to claim.
- The CTF keeps the same £9,000 annual limit and tax-free status as a JISA.
- A transfer to a JISA costs nothing, and the wrapper is never lost by moving.
Drawbacks
- The scheme has been closed to new accounts since 2011, and many providers have let CTF rates and fund choices stagnate.
- Some providers charge percentage-based fees on small balances that eat a large share of the growth.
- Accounts opened by HMRC where the parent never chose a provider are the easiest to lose track of.
Notes for Limited Company Owners
A CTF is a legacy account and cannot be funded from company money directly; top-ups come from your post-tax income like any other gift to a child. Directors with children born in the eligible window may find an overlooked HMRC-opened account holding a few hundred pounds.
Common Mistakes
- Not knowing the account exists: HMRC opened accounts automatically for children whose parents did not, and many have never been claimed.
- Trying to open a JISA alongside the CTF, which is not allowed.
- Leaving a matured account untouched after the 18th birthday instead of moving the money into an adult ISA.
Who Should Avoid It
Nobody can avoid an existing CTF, since it cannot be closed early; the only decisions are whether to keep it, switch provider, or transfer to a JISA.
Official Sources
The rules on this page come from the following official pages and were checked on 25 September 2026. Read how we check our figures.
Related Calculators
Frequently Asked Questions
Should I transfer to a JISA?
Often yes — JISAs typically offer more options and better rates. The transfer preserves the tax-free status.
How do I find a lost CTF?
Contact HMRC's Child Trust Fund helpline or use the GOV.UK online tool.
What happens when the child turns 18?
The account matures and the young person gains full access.