What the Child Trust Fund Can Do for Your Son or Daughter, Choose the Right Way to Invest the Two Hundred and Fifty Pounds
Do you know what the Child Trust Fund is? Hardly any mothers or fathers seem to know about the fact that all babies are given a free £250 voucher from the government to invest in a Child Trust Fund. Your son or daughter’s voucher may be invested in any one of three varieties of CTF account, Stakeholder – a shares-based account thatswaps into cash, a savings account or a shares account. It is an excellent way to invest for the future needs of a youngster
Scottish Friendly is an approved provider of the Child Trust Fund The State is eager for the public at large to have access to Stakeholder accounts and this is the form of account that we are catering for. This means that:
Investments are deposited into Scottish Friendly’s Managed Growth Fund, which hopes to provide strong growth potential
An investment is made partly in shares to make the most of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
go down as well as rise whereas capital would be protected in a deposit account)
It comes with a low ‘Stakeholder’ funds charge of only 1.5 percent yearly
When a person reaches the age of 18 the young person will get a lump sum, wholly free of Capital Gains and Income Tax under present law
It is very affordable – additional payments can be placed in the account from only £10
One of the great attractions of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – if they want can add to the Fund to a ceiling of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).
In a nutshell our Stakeholder account offers a good balance between possible high returns and a lower level of risk. There is also the extra assurance that our account is in accordance with with the Government’s stakeholder criteria. However this doesn’t mean that returns are guaranteed or that Stakeholder accounts are appropriate for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can decrease as well as increase and is not guaranteed.
Only infants born on or after 1st September 2002 are allowed to open a Child Trust Fund. If you have children born before the 1st of September 2002 who are not entitled you could look at investing for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth.
It is evident that saving for a child.your children is a sensible means of preparing for tomorrow.
