Invest in the Future for Your Child, where to Invest the Two Hundred and Fifty Pounds
November 25th, 2008Are you aware of the Child Trust Fund and its benefits? a small amount appear to know about the fact that all new babies get a free £250 voucher from the government to place in a Child Trust Fund. The child’s voucher can be invested in any one of three types of CTF account, Stakeholder - a shares-based account thatswaps into cash, a savings account or a shares account. It is an excellent way to prepare for the future requirements of a youngster
Scottish Friendly is an approved provider of the Child Trust Fund The State is keen for people 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 seeks to provide strong growth potential
An investment is made in part 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
fall 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 yearly
When reaching 18 the child will get a lump sum, totally free of Capital Gains and Income Tax under prevailing legislation
It’s 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the Fund to a maximum of £1,200 per year to help augment the child’s Fund (once added, this money is not allowed to be withdrawn).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 additional assurance that our account is in accordance with with the Government’s stakeholder criteria. Nonetheless this doesn’t mean that returns are assured 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 go up and would not be guaranteed.
Only children born on or after 1st September 2002 are eligible to start up a Child Trust Fund. If you have older children born before the above-mentioned date who are not qualified you could contemplate saving for them with a Child Bond - it’s a tax-free savings plan intended for long-term growth.
The fact is that investing for a child.your children is a sensible means of preparing for tomorrow.