Invest in the Future for Your Child, Choose the Right Way to Invest the 250 Pounds
Do you know what the Child Trust Fund is? surprisingly few appear to have heard of the fact that all newborn children receive a free £250 voucher from the State to place in a Child Trust Fund. This voucher can be invested in any one of three types of CTF account, Stakeholder – a shares-based account thatchanges into cash, a savings account or a shares account. It is an excellent way to invest for the future requirements of a child
Scottish Friendly is a licensed provider of the Child Trust Fund The Government is eager for the public to have access to Stakeholder accounts and this is the type of account that we are supplying. This means that:
Investments are saved into Scottish Friendly’s Managed Growth Fund, which hopes to provide strong growth potential
It invests partly 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
go down 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 every year
At age 18 the child will receive a lump sum, entirely free of Capital Gains and Income Tax under prevailing legislation
It’s affordable – extra payments can be placed in the account from only £10
A major attraction of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – if they want can add to the Fund to a maximum of £1,200 per year to help boost the child’s Fund (once added, this money cannot be withdrawn).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 additional assurance that our account is in accordance with 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 go down as well as rise and would not be guaranteed.
Only children whose birthday is on or after 1st September 2002 are eligible to start up a Child Trust Fund. If you have older kids born before the above-mentioned date who are not eligible you could contemplate investing for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth.
It is undoubtedly the case that investing for your son is a sensible means of preparing for tomorrow.
