Stakeholder accounts invest your child’s money in shares in companies. The Government has made certain rules for these accounts to reduce the risk of investing in shares.
Your child’s money is not invested in just one company, as they could lose out if that company does badly. Instead, it is invested in a number of companies in order to reduce the risk.
Once your child is 13, money in the account starts to be moved to lower risk investments or assets, such as cash. Providers will consider how well shares are performing to decide how much to move over into safer assets and how quickly. This means that although your child’s money may not benefit if the stock market is performing well, it is protected from stock market losses as they approach their 18th birthday.
Once the account is open, all providers must accept minimum contributions of £10 into a stakeholder account, but they can accept less if they wish.
The charge for running a stakeholder account is limited to no more than 1.5 per cent a year. This means this charge can be no more than £1.50 for every £100 in the account. The running cost charges on all other types of Child Trust Fund account are not limited in this way.
The stakeholder account is the one HM Revenue & Customs will open if you don’t use the voucher before it expires.
More information
Types of account
Savings accounts
Accounts that invest in shares
FAQ
Further information about types of account
