What the Child Trust Fund Can Do for Your Child, the Right Way to Invest the Two Hundred and Fifty Pounds
Are you aware of the Child Trust Fund and its benefits? a low number of parents seem to be aware of the fact that all infants are given a free £250 voucher from the State to place in a Child Trust Fund. The voucher may be invested in any one of three kinds of CTF account, Stakeholder - a shares-based account thatchanges into cash, a savings account or a shares account. It is an excellent way to prepare for the future requirements of a young person
Scottish Friendly is an accredited 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 type of account that we supply. This means that:
Investments are paid into Scottish Friendly’s Managed Growth Fund, which hopes to provide strong growth potential
It invests in part in shares to take advantage of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
decrease as well as go up whereas capital would be protected in a deposit account)
It comes with a low ‘Stakeholder’ funds charge of just 1.5 percent per year
When a person reaches the age of 18 the child will get a lump sum, wholly free of Capital Gains and Income Tax under prevailing legislation
It’s 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 contribute to the Fund to a maximum of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).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 reduced level of risk. There is also the additional assurance that our account is in accordance with with the Government’s stakeholder criteria. However this does not mean that returns are guaranteed or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is placed) can fall as well as go up and would not be guaranteed.
Only infants who were born on or after 1st September 2002 are permitted to open a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not eligible you could consider saving for them with a Child Bond - it’s a tax-free savings plan which is intended for long-term growth.
It is evident that saving for a child.your children is a sensible means of preparing for the future.