What the Child Trust Fund Can Do for Your Son or Daughter, Choose the Right Way to Invest the Two Hundred and Fifty Pounds
Are you aware of the Child Trust Fund and its benefits? Hardly any mothers or fathers seem to realise that all infants are given a free £250 voucher from the government to place in a Child Trust Fund. The child’s voucher can be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatchanges into cash, a savings account or a shares account. It is a superb chance to invest for the future requirements of a young person
Scottish Friendly is an authorised provider of the Child Trust Fund The State is keen for the public at large to have access to Stakeholder accounts and this is the kind of account that we are providing. This means that:
Investments are placed into Scottish Friendly’s Managed Growth Fund, which aims to provide good 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 every year
At age 18 the young person will get a lump sum, completely free of Capital Gains and Income Tax under prevailing law
It is affordable – additional payments can be placed in the account from as little as £10
One of the great attractions of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – can contribute to the Fund to an uppermost limit of £1,200 per year to help boost the child’s Fund (once added, this money cannot be withdrawn).
Put succinctly our Stakeholder account provides a good balance between possible high returns and a reduced level of risk. There’s also the additional assurance that our account meets with the Government’s stakeholder criteria. Nevertheless this does not mean that returns are assured 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 fall as well as rise and is not guaranteed.
Only children who were born on or after 1st September 2002 are qualified to start up a Child Trust Fund. If you have children born before the 1st of September 2002 who are not eligible you could contemplate saving for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.
The fact is that saving for your son is a rewarding means of preparing for the world to come.
