The Future of Your Son or Daughter, the Right Way to Invest the 250 Pounds
Are you aware of the Child Trust Fund and its benefits? surprisingly few appear to be aware of the fact that all newborn children get a free £250 voucher from the government to put 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 thatswitches into cash, a savings account or a shares account. It is a superb chance to save for the future requirements of a child
Scottish Friendly is a licensed provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the kind of account that we are catering for. This means that:
Investments are deposited into our Managed Growth Fund, which aims to provide strong growth potential
An investment is made partly in shares to take advantage of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
fall as well as rise whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of just 1.5 percent yearly
At age 18 the young person will receive a lump sum, wholly free of Capital Gains and Income Tax under prevailing law
It is very affordable – extra 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 – can add to the Fund to an uppermost limit of £1,200 per year to help increase the child’s Fund (once added, this money cannot be withdrawn).
All this means our Stakeholder account provides a good balance between potentially high returns and a reduced level of risk. There is also the extra assurance that our account meets with the Government’s stakeholder criteria. However 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 held) can fall as well as rise and would not be guaranteed.
Only children whose birthday is on or after 1st September 2002 are entitled to open a Child Trust Fund. If you have older children born before the 1st of September 2002 who are not qualified you could think about saving for them with a Child Bond – it’s a tax-free savings plan which is intended for long-term growth.
There can be no doubt that investing for a child.your children is a rewarding means of preparing for the future.
