November 27th, 2008
The Future of Your Child, the Right Way to Invest the 250 Pounds
Heard about the Child Trust Fund? a small amount appear to be aware of the fact that all newborn children are given a free £250 voucher from the government to place in a Child Trust Fund. The voucher may be invested in any one of three varieties of CTF account, Stakeholder – a shares-based account thatswaps into cash, a savings account or a shares account. It is a great opportunity to save for the future needs of a young person
Scottish Friendly is an approved provider of the Child Trust Fund The Government 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 are saved into our Managed Growth Fund, which aims to provide good growth potential
An investment is made 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
decrease as well as increase whereas capital would be protected in a deposit account)
It is available with a low ‘Stakeholder’ funds charge of only 1.5 percent yearly
When reaching 18 the child will receive a lump sum, wholly free of Capital Gains and Income Tax under current legislation
It is affordable – extra payments can be placed in the account from only £10
A notable 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can add to the Fund to a ceiling of £1,200 per year to help increase the child’s Fund (once added, this money cannot be withdrawn).
What this means is that our Stakeholder account provides a good balance between potentially high returns and a reduced level of risk. There is also the extra assurance that our account complies with the Government’s stakeholder criteria. Nevertheless this does not mean that returns are assured or that Stakeholder accounts are appropriate for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can decrease as well as increase and is not guaranteed.
Only infants whose birthday is on or after 1st September 2002 are eligible to open a Child Trust Fund. If you have children born before the 1st of September 2002 who are not entitled you could contemplate investing for them with a Child Bond – it’s a tax-free savings plan which was created for long-term growth.
The fact is that investing for a child.your children is a sound means of preparing for the world to come.
