Don’t let your trust fund go to waste

THOUSANDS of teenagers will get access to their Child Trust Funds this month, meaning that, in many cases, they will have to start thinking about the best way to invest the money in the fund until such times as they want to use it.

The average fund is worth just under £900 at the moment, about three-and-ahalf weeks average pay for this age group and a significant sum for most teenagers.

It’s more than most will have been used to handling and can be quite a daunting prospect, taking over full control of it from parents or grandparents.

In many cases, especially given the turbulent economic and job situation that many young people are facing at the moment, the temptation might be to grab the money as soon as you can and go and spend it straight away, or use it to replace income that’s been lost over the last few months.

Most experts would caution against this sort of move, especially given that many funds might have fallen recently with stock market volatility. Holding on to your money until markets recover is likely to be the only way to get back any losses.

Investments are likely to rise and fall in the short term and you shouldn’t get spooked by that. It’s important not to react and withdraw money as soon as you see markets start to fall as a correction is often not far away.

The good thing about being young is that you have plenty of time to ride out stock market volatility and if you don’t need the money that is in your child trust fund for a number of years, then leave it where it is.

You might even want to take the opportunity to start to learn about investments and the different levels of risk that you take with different types on investments.

That way, you might decide that, since you have years, or even decades, before you need access to your money, you can afford to take more risk with your investments rather than less risk.