The Future of Your Son or Daughter, How to Invest the 250 Pounds
Heard about the Child Trust Fund? Not many UK parents seem to realise that all infants get a free £250 voucher from the State to invest in a Child Trust Fund. The child’s 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 save for the future needs of a youngster
Scottish Friendly is a licensed provider of the Child Trust Fund The Government is keen for the public to have access to Stakeholder accounts and this is the kind of account that we are offering. This means that:
Investments go into Scottish Friendly’s Managed Growth Fund, which intends to provide good growth potential
An investment is made partly in shares to get the benefit of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
go down as well as go up whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of just 1.5 percent yearly
When a person reaches the age of 18 the young person will get a lump sum, entirely free of Capital Gains and Income Tax under current legislation
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 – may contribute to the Fund to an uppermost limit of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).
All this means our Stakeholder account offers a good balance between potentially high returns and a reduced level of risk. There’s also the extra assurance that our account complies with the Government’s stakeholder criteria. Nonetheless this doesn’t 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 rise and would not be guaranteed.
Only infants who were born on or after 1st September 2002 are eligible to start up a Child Trust Fund. If you have children born before the 1st of September 2002 who are not eligible you could look at investing for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.
It is undoubtedly the case that saving for a child.your children is a rewarding means of preparing for tomorrow.
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