FSA issues proposals on sale of Child Trust Funds

Children born on or after 1 September 2002 will qualify for a Child Trust Fund (CTF), whether a stakeholder or a non-stakeholder equity-based account. The Government will contribute £250, and an additional £250 to children from low-income households, via a voucher to the party who claims child benefit. A maximum of £1200 may be invested in a CTF account each year.The stakeholder version must, as a minimum, permit penalty-free transfers (less stamp duty and dealing expenses) between accounts and between CTF providers and the annual management charge will be capped at 1.5% of fund value. Minimum payments will be £10. Non-stakeholder CTFs will have to satisfy, broadly, current regulatory obligations.