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Starting a family

Step 2 – Take action

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Child Trust Fund

This is a saving or investment account for every child born on or after 1 September 2002. The government introduced this back in 2002 as a means to encourage long–term saving by young people.

You will receive a voucher for a Child Trust Fund once you've registered for Child Benefit.

How it works

The government will send you a Child Trust Fund voucher for £250 in your child's first year, boosted to £500 if your income is low. You can use this voucher to open a savings or investment account for your child. The government will pay a further £250 or £500 into their account around their 7th birthday. This money and the account belongs to your child and can't be touched until they turn 18. But you can pay more money in up to the annual set limit.

Don't put off opening the account, but do shop around. You can choose from savings accounts, stocks and shares–based accounts or a stakeholder account. It may seem confusing but there is help – for further information visit the Child Trust Fund website.

Use our Child Trust Fund and savings calculator to work out how much your child's Child Trust Fund or other savings may be worth in the future.

Planning for the future

Once you know where you stand, you may want to consider taking proactive steps to plan for the future.

  • For example, could your family cope financially if you or your partner died, lost your job or were ill for an extended period? Of course it probably won't happen, but are you willing or able to take the risk? You may have sufficient savings to cover you but, if not, insurance may help. For further information see Are you covered?.
  • If you can afford it, now is also a good time to start planning for nursery and school fees, or to set up a fund to help your child through college or university. It may seem a long way off but the sooner you start, the better. You might like to discuss your options with an independent financial adviser. For further information see Getting financial advice.
  • And having a family is often the trigger for buying your first home or moving to a larger one. Getting a mortgage is maybe the last thing on your mind – but it's probably the biggest financial commitment you'll ever make. Our Buying a home guide will help you get started.

Back to work

  • If you are planning on returning to work, it's wise to look at childcare options well in advance. Whether you're considering a nanny, nursery or child–minder, costs can vary and places get booked up. It's worth doing your homework – the Daycare Trust website will help you.
  • Claim any help with the costs from either tax credits or your employer, if appropriate. For more information, visit the Directgov website.
  • Help with childcare costs from the State or your employer is available only if you use eligible childcare. In general this doesn't include the cost of childcare provided by your child's grandmother, aunt or other relative unless they fulfil the criteria. However, if your relative is a registered childminder, looks after your child in their home (rather than yours) and looks after at least one other unrelated child as well, they may well be eligible. For further information visit the Directgov website.
  • Find out whether you will gain or lose financially if you return to work, by using our Return to work calculator.

What next?

Explore more guides

  • Are you covered? – find out how to protect yourself and your family against unexpected events.
  • Saving for tomorrow – whether you're putting money aside for emergencies or saving for your future goals, this guide gives you some useful tips.
  • Buying a home – whether you're buying for the first time or moving home, our guide can help you.
  • Getting financial advice – find out how and where you can get financial advice.

Top tips

  1. Try to plan ahead for your new lifestyle.
  2. If you are a couple, work out how you'll make financial decisions.
  3. Think about how you'll manage on a reduced income and make cuts where you can.
  4. Check which State benefits you're entitled to.
  5. Take out a Child Trust Fund account and think about saving for your child's future.
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