Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Deferred
Providers are making even more money from some Child Trust Funds in other ways, as...
Conclusion
Providers are making even more money from some Child Trust Funds in other ways, as other types of Child Trust Fund have no cap on fees. Around 1.3 million Child Trust Funds (0.3 million stocks and shares accounts and 1.0 million cash deposit accounts) are not subject to the cap on fees. The Share Foundation described a case in which a provider had asked the charity to pay £20 for a single account statement, which it declined to do.13 7 Qq 24, 37, 56 8 Q 26, C&AG’s Report, para 2.4 9 Qq 25, 26 and 34 10 Qq 40–42 11 Qq 28, 46–47, 55; Correspondence from HMRC to PAC dated 7 June 2023 12 Qq 33, 35, 37; C&AG’s Report, para 3.8 13 Qq 35–36; C&AG’s Report, Figure 2 Child Trust Funds 11
Government Response Summary
The government agrees with the Committee's observation on uncapped CTF fees but states that providers have the lead responsibility for terms and conditions, which are industry matters. HMRC will encourage providers via a working group to adhere to their responsibilities under FCA rules, including the new consumer duty for fair value.
Government Response
Deferred
HM Government
Deferred
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 Child Trust Fund (CTF) providers have the lead responsibility in making sure account holders are aware of and have access to their accounts. 2.3 HMRC is an active participant in the dedicated CTF working group which comprises trade bodies such as The Investing and Saving Alliance and UK Finance, and CTF providers such as OneFamily and Nationwide Building Society. 2.4 As set out above, the need for CTF providers to trace, and engage with, account holders is an established feature of discussions. HMRC will continue to use these meetings to encourage further activity on the part of CTF providers, who are aware of their responsibilities to their customers under Financial Conduct Authority (FCA) rules. While terms and conditions are a matter for the industry, the new FCA consumer duty rules require firms to act to deliver good outcomes for retail customers and provide products and services which offer fair value. 2.5 HMRC also acts on any intelligence it receives from FCA or others regarding compliance problems with CTFs.