The Future of Your Child, Choose the Right Way to Invest the 250 Pounds
Heard about the Child Trust Fund? Hardly any mothers or fathers seem to have heard of the fact that all new babies are given a free £250 voucher from the State to invest 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 an excellent way to save for the future needs of a youngster
Scottish Friendly is an authorised provider of the Child Trust Fund The Government is keen for the public to have access to Stakeholder accounts and this is the kind of account that we are offering. This means that:
Investments go into our Managed Growth Fund, which intends to provide strong 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 can
go down as well as rise whereas capital would be protected in a deposit account)
It comes with a low ‘Stakeholder’ funds charge of just 1.5 percent perannum
At age 18 the child will get a lump sum, wholly free of Capital Gains and Income Tax under prevailing legislation
It’s affordable - additional payments can be put 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 contribute to the Fund to an uppermost limit of £1,200 per year to help boost the child’s Fund (once added, this money may not be withdrawn).
In a nutshell our Stakeholder account offers a good balance between possible high returns and a reduced level of risk. There’s also the extra assurance that our account is in accordance with with the Government’s stakeholder criteria. Nonetheless this doesn’t mean that returns are guaranteed 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 held) can decrease as well as rise and is not guaranteed.
Only children who were born on or after 1st September 2002 are permitted to open a Child Trust Fund. If you have older children born before the above-mentioned date who are not entitled you could consider investing for them with a Child Bond - it’s a tax-free savings plan which was created for long-term growth.
There can be no doubt that investing for your daughter is a sound means of preparing for the world to come.
