Child Trust Fund: ‘My £250 investment is now worth only £12’

Statements seen by the BBC show the fund was worth just over £300 by 2012.

But as of 2013, a £30 annual administration charge began on the account which Max’s parents said they knew nothing about.

The maximum fee allowed to be charged on Child Trust Funds was set at 1.5% but the BBC has calculated Max was effectively charged 10% and more each year.

The fund was originally administered by F&C Investments but after a series of industry takeovers ended up with multi-billion pound investment firm Columbia Threadneedle by the time it matured.

It told the BBC the type of account chosen by Max’s parents was a CTF Shares account, which has a different fee model. Subsequently the £25 plus VAT charge was for administering the account, not the underlying investment.

The company told the BBC it had tried to contact Max’s parents when it put in place “the current charging structure” but that its letters were returned unopened.

Max’s parents said they had moved house and did not receive the letters despite setting up a forwarding system. They said they knew the details of Max’s fund and knew when it was due to mature but had not expected to be contacted before then.

Columbia Threadneedle said its Child Trusts Funds “require customers to actively make their own investment decisions and without authorisation and communication from customers, we are unable to take action on their behalf”.