Invest in the Future for Your Son or Daughter, the Right Way to Invest the Two Hundred and Fifty Pounds
Do you know what the Child Trust Fund is? remarkably few seem to be aware of the fact that all newly born babies receive a free £250 voucher from the government to place in a Child Trust Fund. The voucher may be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatswitches into cash, a savings account or a shares account. It is a great opportunity to invest for the future needs of a child
Scottish Friendly is an authorised provider of the Child Trust Fund The State is eager for the general public to have access to Stakeholder accounts and this is the form of account that we are catering for. This means that:
Investments are placed into Scottish Friendly’s Managed Growth Fund, which seeks to provide strong growth potential
It invests 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 comes with a low ‘Stakeholder’ funds charge of only 1.5 percent every year
At age 18 the young person will receive a lump sum, completely free of Capital Gains and Income Tax under present legislation
It is affordable – extra payments can be put in the account from as little as £10
A notable attraction 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to an uppermost limit of £1,200 per year to help boost the child’s Fund (once added, this money is not allowed to be withdrawn).
In a nutshell our Stakeholder account offers a good balance between potentially 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. Nonetheless this does not mean that returns are assured 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 invested) can go down as well as rise and is not guaranteed.
Only children who were born on or after 1st September 2002 are eligible to start up a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not entitled you could think about investing for them with a Child Bond – it’s a tax-free savings plan 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.
