The Government will formally consult in 2015 on the application of the “lifestyling” requirement to over 4 million stakeholder child trust funds (CTF). This requirement is designed to manage volatility in account investments as stakeholder CTFs approach maturity, when the account holder turns 18.
A number of respondents to the Government’s recent consultation on the transfer of funds from CTF to junior ISA questioned the value of lifestyling for many CTF holders. The Government wish to explore this issue further through consultation with CTF providers, account holders, parents and other interested groups. This consultation will take place alongside the Government’s changes to the CTF rules that will allow parents to transfer CTF funds to a junior ISA from 2015.
Pending the outcome of this consultation, the Government propose to amend the child trust fund regulations to defer the requirement upon CTF providers to commence lifestyling for two years. CTF providers will not therefore be required to begin lifestyling stakeholder CTFs before account holders reach 15.