The government has set certain standards which a stakeholder account must comply with and these are the only type of accounts that can be used when allocated by HMRC.
The requirements are:
The funds in the account should be invested predominantly in the stock market and in the shares of a spread of companies
Charges must not be more than 1.5% of the value of the fund in the account each year
Additional payments of £10 or more must be accepted either by cheque, cash, direct debit or standing order
Non-stakeholder accounts can invest in different types of assets and are not restricted to maximum charges of 1.5%.
The Sheffield Mutual CTF is a stakeholder account, but if you are concerned about the possibility of stock market losses you can request a transfer to our lower-risk Investment Junior ISA.
Please note that if you transfer a stakeholder CTF to another CTF or a junior ISA, you may lose some or all of the stakeholder features.