Invest in the Future for Your Child, Choose the Right Way to Invest the 250 Pounds
Heard about the Child Trust Fund? surprisingly few appear to have heard of the fact that all newborn children get a free £250 voucher from the State to put in a Child Trust Fund. The voucher can be invested in any one of three sorts of CTF account, Stakeholder – a shares-based account thatswaps into cash, a savings account or a shares account. It is an excellent way to save for the future requirements of a infant
Scottish Friendly is an accredited provider of the Child Trust Fund The Government is eager for the public to have access to Stakeholder accounts and this is the sort of account that we provide. This means that:
Investments are deposited into Scottish Friendly’s Managed Growth Fund, which aims to provide good growth potential
An investment is made in part 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
decrease as well as increase whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of just 1.5 percent perannum
When a person reaches the age of 18 the young person will get a lump sum, completely free of Capital Gains and Income Tax under present legislation
It is affordable – additional payments can be placed in the account from as little as £10
An attractive feature 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to the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money cannot be withdrawn).
All this means our Stakeholder account offers a good balance between possible high returns and a reduced level of risk. There is also the extra 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. 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 would not be guaranteed.
Only children whose birthday is on or after 1st September 2002 are authorised to open a Child Trust Fund. If you have older children born before the 1st of September 2002 who are not qualified you could contemplate saving for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.
There can be no doubt that investing for a child.your children is a sensible means of preparing for tomorrow.
