Have you got to grips with the Child Trust Fund and the benefits that it can bestow upon your kids? A remarkably
low number of parents appear to have heard of the fact that all newly born babies get a free £250 voucher from the the State to invest. Your son or daughter’s vouchermay be invested in any one of threesorts of CTF account, Stakeholder – a shares-based account that switchesinto cash, a savings account or a shares account. It is a great opportunity to prepare needs of a child
Scottish Friendly is an approved provider of the Child Trust Fund Voucher. The State is eager for the general public to have access to Stakeholder accounts and this is the kind of account that we are catering for. This means that:
• Investments are placed into Scottish Friendly’s Managed Growth Fund, which aims to provide strong 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 cango down 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% per year
• When reaching 18 the child will receive a lump sum, totally free of Capital Gains and Income Tax under current legislation
• It’s affordable – additional payments can be put in the account from only £10
A key feature of the Child Trust Fund is that anyone – parents, grandparents, aunts and uncles, friends – may give to the Fund to a maximum of £1,200 per year to help increase the child’s Fund (once added, this money is not allowed to be withdrawn).
Put succinctly our Stakeholder account offers a good balance between possible high returns and a lower level of risk. There’s also the additional assurance that our account meets with the Government’s stakeholder criteria. However this doesn’t mean that returns are guaranteed 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 held) can fall as well as increase and is not guaranteed.
Only children who were born on or after 1st September 2002 are authorised to start up a Child Trust Fund. If you have above-mentioned date who are not qualified you could think about saving for them with a Child Bond – it’s a tax-free savings plan intended for long-term growth. The fact is that saving for your daughter is a sensible means of preparing for the future.
