Have you got to grips with the Child Trust Fund and the benefits that it can bestow upon your kids? Few UK parents startling
small number of parents appear to have made the discovery that all babies get a free £250 voucher from the government to invest. This vouchercan be invested in any one of threekinds of CTF account, Stakeholder - a shares-based account that changesinto cash, a savings account or a shares account. It is an excellent way to invest life of a young person
Scottish Friendly is a licensed provider of the Child Trust Fund Voucher. The Government is keen for the public at large to have access to Stakeholder accounts and this is the form of account that we are catering for. This means that:
• Investments are paid into our Managed Growth Fund, which aims to provide good growth potential
• It invests 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 canfall as well as go up whereas capital would be protected in a deposit account)
• It is available with a low ‘Stakeholder’ funds charge of only 1.5% per year
• When reaching 18 the young person will get a lump sum, completely free of Capital Gains and Income Tax under present law
• It is affordable - additional payments can be placed in the account from as little as £10
One of the great attractions 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to the Fund to a maximum of £1,200 per year to help augment the child’s Fund (once added, this money is not able to be withdrawn).
What this means is that our Stakeholder account offers a good balance between potentially high returns and a reduced level of risk. There is also the extra assurance that our account meets with the Government’s stakeholder criteria. Nevertheless 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 invested) can decrease as well as increase and isn’t guaranteed.
Only infants 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 entitled you could look at investing for them with a Child Bond - it’s a tax-free savings plan aiming for long-term growth. It is evident that investing for your daughter is a sensible means of preparing for tomorrow.