‘Lifestyling’ of Child Trust Funds
This consultation seeks views and evidence on the costs and benefits of lifestyling for Child Trust Fund account holders and providers.
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.