Source · Select Committees · Public Accounts Committee
Sixty-Seventh Report - Child Trust Funds
Public Accounts Committee
HC 1231
Published 26 July 2023
Conclusions (3)
8
Conclusion
Deferred
Providers can charge fees up to a cap of 1.5% per year on ‘stakeholder’ accounts, the most common type of Child Trust Fund account, which The Share Foundation described as equating to nearly £30 per year on a typical account. HMRC does not track how much providers are charging. The …
Government Response Summary
The government agrees with the Committee's observation on CTF provider 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.
9
Conclusion
Deferred
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 …
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.
11
Conclusion
Deferred
We heard that only four providers, out of around 55 in total, have been proactive and voluntarily worked in partnership with the Tracing Group—a commercial service for tracing the owners of dormant accounts—to set up a Child Trust Fund register separate to the one held by HMRC. The register contains …
Government Response Summary
The government agrees with the Committee's observation regarding provider proactivity in tracing accounts but states that CTF providers have the lead responsibility for tracing. HMRC will continue to encourage providers through a working group to adhere to their responsibilities under FCA rules, including the new consumer duty.